Sunday, 16 December 2018

Why Price to Book and not PE for finance companies?



Am afraid that’s not the right way either as the market cap reflects the equity while the operating profit in this case being an NBFC is driven mainly by debt, as the leverage is over 10 times. The right things to look for are P/B, growth in book over time, NIM, RoA, RoE, Cost of funds etc.
I suggest you go through this thread.