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Zerodha ke co-founder and CEO, Nikhil Kamath ka ye manna hai ki Indian markets are in a very expensive territory as of now and retail investors ko aleat rehene ki zaroorat hai

Let’s check, BEER Ratio ka iss baare mei kya kehna hai

BEER Ratio default free government bond yields ko equity earnings se compare karke ye batata hai ki stock markets ki valuation kesi hai. Isski calculation bohot simple hai.

Hum numerator mei 10 saal ki government bond yields rakhenge that is currently at 7.29% and denominator mei Sensex ki earnings yield jo ki iss waqt 4.2% par hai.

BEER Ratio = Bond Yield / Earnings Yield = 1.74

Earnings Yield = EPS of Sensex/ Price of Sensex

Historical analysis ke mutaabik, iss waqt valuations thode se expensive zaroor hai but ek comfortable range mei hai given the bright prospects ahead.

Aage jaate huye, kaafi saara focus companies ki earnings growth aur margin performance par rahega as Corporate India expects a relief from raging inflation