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Showing posts from February, 2013

Under the Radar: India's Small-Cap Equities (Part Two)

About a year ago, we analysed the valuation of India's small and mid-cap indices to determine whether they were attractive for purchase by investors (see post below).
Our analysis revealed that the indices appeared undervalued by historical standards.
We decided to have another look at the current valuations of the indices to recap performance and determine the price attractiveness today.
When we wrote our post last year, the small-cap index closed out at the level of 5,550.14.
The closing level today is 7,006.73 – resulting in a gain of over 26% in a little over a year.
So, how does this level stack up against the basic fundamental metrics of the underlying businesses?  Here’s a summary of the valuations sourced from the BSE website:

Table 1: Annual valuations (2006 to 2012) Year High Low Close Price/ Book value 2006     7,872.80    4,480.45     6,892.32            2.05 2007  13,376.80    6,001.33  13,348.37            2.78 2008  14,239.24    3,221.70     3,683.11         …