Shares of some 15 listed companies are being traded at P/E ratios ranging between 350 and 4030 due to appreciation observed in share prices despite they witnessed no significant rise in EPS.
The P/E (price-to-earning) ratio is the ratio for valuing a company that measures its current share price relative to its EPS (earnings per share). The ratio is also sometimes known as the price multiple or the earnings multiple.
An investor can have an idea regarding a company's growth taking into account its P/E ratio.
"If a company's P/E ratio is 15, an investor can expect that it will register 15 per cent growth in next two or three years. Then the investor can take investment taking into account that P/E ratio," Md. Moniruzzaman, managing director at IDLC Investments, said.
Asked about high P/E ratio, he said in some cases a company's P/E ratio can be high at the initial stage due to high growth.
"But the growth observed at the initial stage may not sustain in future and then the high P/E ratio of the later period may not be rational," said Mr. Moniruzzaman.
Rahima Food Corporation, presently an 'A' category, has reported an EPS of Tk 0.04 per share for January-March, 2021.
On June 27 last, the company's share price closed at Tk 209.80 each on Dhaka Stock Exchange.
Later, the company's share price closed at Tk 327.40 on Thursday each with a rise of 56 per cent or Tk 117.6.
The company's share price closed at Tk 322.40 each on Sunday and the P/E ratio has stood at 4030 based on basic reported in interim financials, according to information of Dhaka Stock Exchange (DSE).
The share price of Bangas, presently an 'A' category company, closed at Tk 111.90 each on June 17 last.
The company's share price closed at Tk 144.10 each on August 9 with a rise of 29 per cent or Tk 32.20. The company's share price closed at Tk 137.9 on Sunday and P/E ratio has stood at 940.23 based on the latest interim financials' basic EPS.
The share price of Kay & Que closed at Tk 176 on June 16 last. On August 12, the company's share price closed at Tk 208.90 each with a rise of 60 per cent or Tk 104.9.
Based on Sunday's closing price and interim financials, the company's P/E ratio has stood at 358.38.
The P/E ratio of Libra Infusions stood at 656.86 on Sunday based on basic EPS of the latest interim financials.
On July 6 last, the company's share price closed at 526.60 each. later, the company's share price rose 31 per cent or Tk 163.10 to close at Tk 689.70 each on Sunday.
The share price of Aziz Pipe closed at Tk 87.40 each on June 27 last. The company's share price rose of 50 per cent or Tk 43.50 to close at Tk 130.90 each on Sunday and the P/E ratio stood at 503.46 based on the latest audited financials.
The company, however, incurred a loss of Tk 0.37 per share for January-March, 2021 against the EPS of Tk 0.05 for same period of the previous year.
The P/E ratio of Desh Garments is 439.53 based on the latest audited financials. Earlier, the company's share price closed at Tk 132.50 each on June 2 last.The company's share price closed at Tk 189 each on Sunday with a rise of 42.64 percent or Tk 56.5 from the closing price observed on June 2 last.
The p/E ratio of Samata Leather stood at 1003.33 based on the latest audited financials. On June 27 last, the company's share price closed at Tk 69.70 each. Later, the company's share price rose 34.57 per cent or Tk 24.10 to close at Tk 93.80 on August 9 last. The company's share price closed at Tk 90.30 each on Thursday.
The P/E ratio of Ambee Pharmaceuticals is 497.42 based on the company's interim financials. The company's share price closed at Tk 431.10 each on Sunday.
On July 6 last, the company's share price closed at Tk 404.50 each. Later, the share price rose to Tk 489 each on August 9 with a rise of 21 per cent or Tk 84.5.
The share price of National Tubes, which incurred a loss of Tk 0.19 per share for January-March, 2021, closed at Tk 91.70 each on June 27.
Later, the company's share price closed at Tk 111.9 on August 9 with a rise of 22.02 per cent or Tk 20.20. The company's share price closed at Tk 107.80 each on Sund and the P/E ratio has stood 1796.67 based on the latest audited financials.
Of other companies, Sonali Ansh's P/E ratio is 470.30, Legacy Footwear 795, Monospool Paper Manufacturing 451.34, and Monno Fabrics 468.75 based on basic EPS of the interim financials.
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