No longer discounted: Mid- and small-cap IT firms enjoy premium at bourses

July 15, 2021 admin News 0

Business Standard


This is a contrast to last year, when mid- and small-cap IT companies traded at a P/E multiple of 13.3x at the end of March 2020

Topics
IT companies | IT stocks | mid cap stocks

Krishna Kant  |  Mumbai 

The rally in mid- and small-cap stocks has spilled over into the IT sector as well. Second and third-tier IT stocks, which historically traded at a discount to the big five IT companies, are now trading at nearly 25 per cent premium to their large-cap peers.

The smaller IT companies have a price-to-earnings (P/E) multiple of nearly 38 times against the big five’s current P/E multiple of around 31x. This is a contrast to last year, when mid- and small-cap IT companies traded at a P/E multiple of 13.3x at the end of March 2020, while large-caps had a multiple of 18.9x. This premium is …

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First Published: Wed, July 14 2021. 22:41 IST

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