Motilal Oswal 24th Annual Wealth Creation Study Press Release - Summary
Download the Motilal Oswal 24th Annual Wealth Creation Study 2019 in PDF format. Understanding the key drivers of Intrinsic Value is essential for investors. The two main factors are Return on Equity (RoE) and Earnings growth. Companies can create Intrinsic Value only when their RoE is higher than the Cost of Equity. If a company has low RoE, it must focus on improving it. On the other hand, companies with high RoE should concentrate on increasing their growth.
Importance of High RoE and Earnings Growth
Both high RoE and high Earnings growth can be challenging to maintain over time. A PEG (Price to Earnings to Growth ratio) of less than 1x serves as a near-infallible formula for achieving healthy outperformance in the market. However, current market valuations suggest that strong earnings growth is still hard to come by.
Market Outlook
Due to these challenges, it is expected that the market will continue to remain soft in the upcoming periods. For those who want to dive deeper into the insights of the Motilal Oswal 24th Annual Wealth Creation Study, don’t forget to download the PDF below!
