Motilal Oswal 23rd Annual Wealth Creation Study
Motilal oswal 23rd annual wealth creation study 2019, The two key drivers of Intrinsic Value are Return on Equity (RoE) and Earnings growth, Companies create Intrinsic Value only when they earn RoE higher than Cost of Equity, Low RoE companies must focus on increasing RoE, high RoE companies on increasinggrowth, Both high RoE and high Earnings growth are difficult to sustain, PEG (P/E to Growth ratio) less than 1x is a near-infallible formula for healthy outperformance, Current market valuations imply robust earnings growth, which remains elusive. Hence,expect market to remain soft