Understanding Maruti Sec.’s Valuation Metrics
At first glance, Maruti Sec.’s price-to-earnings (PE) ratio stands at an unusually low figure, which might typically indicate undervaluation. However, this figure is distorted by the company’s negative book value, reflected in its price-to-book (P/B) ratio being negative. Such a scenario often signals accounting anomalies or financial distress, complicating straightforward valuation interpretations.
Further scrutiny reveals the enterprise value (EV) multiples, including EV to EBIT and EV to EBITDA, both hovering below 4. This might suggest the stock is trading at a discount relative to earnings before interest, taxes, depreciation, and amortisation. Yet, the EV to capital employed ratio is exceptionally high, indicating tha...
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