Market Valuation and Stock Buying at this level

Hi All,

Current Nifty P/E is: 23.62. Historically, market has given lacklustre returns when bought at this level.
Link here:

I have few quereies:
If I have lumpsum to invest, is it suggested to invest at this level? Would you buy in one shot or over several months? Would you even buy or sit on sideline to wait for market to correct?

I have small positions in:
Current Holdings:

  1. ICICI
  2. DHFL
  3. KPIT Tech
  4. Torrent Pharma
  5. Debt Funds
  6. FD

I am interested in the list below, but looks like they are run up quite a lot:
To-Buy List:

  1. HDFC Bank
  2. Yes Bank
  3. TCS
  4. eClerx
  5. Brittania
  6. Alembic Pharma
  7. Aurobindo
  8. Welspun India
  9. PI Ind
  10. Indo Count
  11. HCL Tech
  12. HDFC
  13. Axis Bank
  14. Amara Raja
  15. Bajaj Finance
  16. MRF
  17. Motherson Sumi
  18. Tata Motors

The stock selection is based on CAGR Profits and RoE and industry prospects.

Any comments?

MRF- Reducing rubber price is a positive for MRF and also they are looking into geographic location. Good bet.

TCS - in my opinion future growth is not really visible. It has corrected a bit, so worth looking at…

Bajaj finance - valuations not so comfortable. Correction will be painful period. All nbfc are too costly at the moment.

Britannia - may a proxy play option work better- Bombay burmah trading company. BBTC valuations are cheaper than
Britannia do correction will be not so painful.

Tata motors - Tata motors dvr is a better option Imo. But has run up a bit, wait for correction. New products looks promising. Could be a good bet…

Axis bank - relatively low NPA.

Disclosure - invested in Bombay burmah trading company, axis bank,

1 Like

Hi Sameer,

Your buy list looks great! Personally, I too have Alembic, HCL Tech, Aurobindo, HDFC bank, PI industries, Tata motors, Amara raja and TCS under my radar. Currently sitting on 80% cash.
I track Nifty’s Price to book ratio and dividend yield along with the usual P/E ratio. I plan to build positions extremely slowly over the period of 6-12 months. I might use a pyramid approach buying in 3 lots. So for example if I have to buy 10,000 shares of a particular company, I would buy 1500, followed by 3000, and finally buying rest 5500 shares. The time period between buying the first lot and third lot might be as less as 2 weeks or as long as 9 months. I also have a soft preference order in my buying list. If multiple companies reach my target valuation, I would give preference to some first compared to others.

warmest regards

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Hey Nishant,

Your plan totally makes sense. I am also sitting on cash right now, till market comes to a realistic valuations. It’s not just important to buy right stocks, but also at the right prices. :slight_smile:

1 Like