Recently, the Nifty index dropped by 16% when looking at US dollars since it hit a high in September. This drop has led many to wonder if it’s a good time to buy stocks, especially since 29 out of 50 Nifty companies have prices below their average from the past five years.
Looking at some specific company numbers, Tata Motors is currently priced at a low P/E (price-to-earnings) ratio of 7.89, while its average has been 15.77—this is a big drop! Asian Paints is also down, with its P/E falling from 69.73 to 50.70, a 34% price drop from its peak. On the other hand, Reliance Industries, a big player in India, is at a P/E of 24, which is just slightly below its five-year average of 25.23.
Some stocks have held steady despite the market drop. For example, HUL (Hindustan Unilever) has a P/E of 49.22, compared to an average of 62.10, while Sun Pharma sits at 35.21 versus 41.46. This shows that people still trust businesses in the consumer goods and healthcare sectors.
However, IT stocks like Wipro, Tech Mahindra, Infosys, and HCL Tech are doing well and are priced higher than their averages. Experienced investor Manish Chokhani thinks the market’s drop is actually good news. He mentioned, “Markets have corrected to give investors a chance to buy stocks they want for the long term.” He also pointed out that during good times, people “rent” stocks, but in tough times, they find their real owners again.
Chokhani believes this drop can help investors purchase shares in good companies at lower prices. Even large companies are now trading at about 19 times what they’re expected to earn next year, but the market can move up and down quickly.
Foreign investors are pulling out money due to worries about company earnings and tariffs from former US President Trump, leading to a 16% decline in the Nifty in USD since its peak in September 2024. Mid-cap and small-cap stocks have suffered worse with drops of 21% and 23%, respectively. Additionally, the Nifty’s P/E ratio has fallen to 19 from a peak of 21.3.
The earnings season has been tough, with companies announcing lower profits. Nomura noted that earnings estimates for companies in the Nifty50 were lowered by 3.5% since January 2025.
Anand K Rathi from MIRA Money sees things similarly. He thinks that prices of many stocks are starting to look more reasonable. Rathi advises a smart investment strategy, like investing slowly over the next few months, especially as companies report their earnings. This way, investors can take advantage of price changes and position themselves well when the market bounces back.
In conclusion, although many Nifty stocks are trading lower than their usual prices, caution is still important as market ups and downs continue. A gradual investment approach may help deal with risks, and focusing on strong companies is essential. Overall, this market might hold some exciting opportunities for thoughtful investors.
