The meltdown in Adani Group companies’ market capitalisation (m-cap) in the past month had led to a sharp decline in equity valuation, but group companies continue to trade at a premium to the valuation of the S&P BSE Sensex. This, observed analysts, exposes its shareholders to further downside in stock price, unless Adani Group companies report a big surge in earnings in the quarters ahead.
The 10 Adani Group companies were trading at a trailing price-to-earnings (P/E) multiple of about 29.4x on Monday on average — still, nearly 30 per cent premium to the Sensex trailing P/E of 22.5x.
Similarly, Adani Group companies' current price-to-book (P/B) ratio at 4x is nearly 24 per cent higher than the benchmark index’s P/B ratio of 3.3x.
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