Thanks to the 50 per cent gain in the past six months, the stock of Maruti Suzuki India boasts of the highest price multiple among conventional car makers in the world. It has a one-year forward price-earnings (PE) multiple of 22.8.
The larger car makers by revenue such as Daimler, Volkswagen, BMW, Honda Motor and General Motors have forward PEs between 5.5 and 10. ETIG has considered the universe of global car makers with more than $5 billion of market capitalisation and net profit in the last fiscal.
Ferrari and Chinese car maker BYD are second and third most richly valued auto stocks after Maruti. Other Indian companies such as Asian Paints, Shree Cements, Kotak Mahindra Bank and Eicher Motors also figure among the stocks with the richest valuations globally in their respective sectors. The global car market is expected to grow by nearly 2 per cent in the current fiscal, while Maruti’s volume growth in India has been 12.2 per cent so far in FY17.