Buying Tata Motors shares at these levels could be a costly mistake
Equitymaster 6 min read 05 Dec 2023, 01:44 PM IST
- The reason the stock is trading so high is that EPS from the past 12 months stands at ₹46, and investors seem to believe the company can improve on this. But it would be wrong to assume Tata Motors has somehow become immune to the vicissitudes of the auto industry.
I was once asked for a formula to calculate the fair value of a stock. The answer is an appropriate PE ratio multiplied by the company's earnings per share (EPS).