Your E-mail Address: Subscribe Modify/Remove Privacy Statement Home > India Story > Can the Sensex hit 24,875 by 2009? Where can the Sensex E.P.S go in 3 years? Year 2005 2006 2007 2008 2009 E.P.S Growth rate of the sensex E.P.S P.E E.P.S P.E E.P.S P.E E.P.S P.E E.P.S P.E 10% 476 15.3 574 17.1 631 15.5 696 14.1 764 12.8 15%   660 14.8 759 12.9 873 11.2 20%   689 14.2 826 11.9 992 9.9 Note: The PE of the sensex has been calculated with reference to the current index level of 9900 (February 06, 2006) Where can the Sensex go by 2009 E.P.S Growth rate of the sensex 10% 15% 20% Sensex E.P.S in 2009 at different levels of growth 764 873 992 Market PE- Assumed to be in line with sensex E.P.S growth 10 15 20 SENSEX IN 2009 at a PEG of 1 7640 13095 19840 SENSEX IN 2009 at crazy PE of 25 in the backdrop of a 20%+ growth in earnings.   24875         Valuations at previous bottoms Period Sensex Values P/E Apr-93 1980 27 Sep-01 2595 15 Apr-03 2905 12 May-04 4228 15   Valuations at previous peaks Period Sensex Values P/E Apr-92 4546 53 Sep-94 4643 46 Feb-00 6151 27 Feb-06 9900 18  Key observations: Historically the sensex has never traded at a PE of less then 8 times. If corporate earnings were to grow at 20% The E.P.S for the sensex would be Rs 990 in Fy 09. A PE multiple of 20 times we would take us to an Index level of 19,800. If the Earnings were to grow by 15% only and the market PE were 15 we would still be at an index level of 13,095. In case there was an increased participation by the local investor the sensex PE's would expand further and we may well be on way to 25,000+ for the Index. Over the next few years' local investors are expected to bring in more money into stocks. Read Where is the Indian investor putting his saving Back Home  |  About Us  |  Manias  |  Thoughts & Ideas  |  Insurance  |  Glossary  |  Site Map  |  Forum  |  Contact Us Copyright © 2005 -   The Equity Desk Partner Site: Powered by: