Auto sector's valuation premium over the Nifty has dropped to 20% from 37% at the September 27, 2024 peak, thanks to a sharp fall of 27% in the auto stocks versus 16% fall in the Nifty during this period. The auto sector current price-to-earnings (P/E) multiple based on FY26E EPS stands at 22.4X versus Nifty's 18.5X, according to a note published by SBI Securities.
Nifty Auto's P/E multiple at the lifetime high of 27,696.10 stood at 30 as against Nifty's P/E multiple of 21.9 at an all-time high level of 26,277.35, the SBI Securities note said.
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