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International Business Management

ISSN: Online
ISSN: Print 1993-5250
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Stock Valuation of Select Companies using Residual Income Method

G.S. Nalini and Trinley Paldon
Page: 495-504 | Received 21 Sep 2022, Published online: 21 Sep 2022

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https://doi.org/10.36478/ibm.2019.495.504

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Abstract

This study is carried out in order to examine the intrinsic value of the selected companies namely HDFC, Aditya Birla Capital Ltd., India Infoline Ltd., Mahindra and Mahindra Finance, Bajaj Finance, India Cements Capital Ltd. and LIC Housing Finance Ltd. and to find out if their stocks are appropriately valued. The study period is based from the year 2004-2018 on which residual income valuation method has been applied. It is found that Housing Development Finance Corporation Limited (HDFC Limited), Aditya Birla Capital Limited, LIC Housing Finance Limited, Mahindra and Mahindra Finance Limited, Bajaj Finance Limited and India Infoline Limited’s stock is overvalued, so, investing in the above mentioned companies stocks are not recommended whereas India Cements Capital Limited’s stock is undervalued comparing to its market price, so, investing in this stock is recommended.

How to cite this article:

G.S. Nalini and Trinley Paldon. Stock Valuation of Select Companies using Residual Income Method.
DOI: https://doi.org/10.36478/ibm.2019.495.504
URL: https://www.makhillpublications.co/view-article/1993-5250/ibm.2019.495.504