Historical Price to Book valuation of Nifty 500 stocks

Last week I was compiling how consistent wealth creators are faring vis a vis there 2008-09 prices.

I wasn’t the only one thinking on those lines, the guys at Ventura did even better and put together a comprehensive 20 year Price to Book Value of Nifty 500 stocks

Fantastic, you can download a copy from here (link now broken)

Some observations

1. Don’t do bottom fishing with 100 percent allocation, the price can go even lower if history is a guide

e.g. I was reviewing one the companies removed from scorecard KRBL P/B of 0.8 sounds cheap unless you see 0.2 in 2008/9

Table of KRBL market cap, price, book value and P/B from FY02 to FY20, with low P/B of 0.2 in FY09 and FY10 and a high of 6.9 in FY18

2. Don’t buy just because it’s cheap DLF market cap is the same today in as 2009 when it was statistically cheap as well

Table of DLF market cap, price, book value and P/B from FY08 to FY20, with P/B high of 16.2 in FY08 and low of 0.7 in FY16

3. If 2008-9 was a guide the rebound can surprise you

Look at Britannia Industries and 3M India

Table of Britannia Industries P/B history, FY00 to FY20, with FY09 and FY10 highlighted and market cap rising from about 3,400 to 56,800 crore

Table of 3M India P/B history, FY00 to FY20, with a low of 2.2 in FY10 and a high of 23.8 in FY18

The report also gives a sectoral view, will share some insights in a subsequent post.

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