As many as 104 companies are trading at a price to earnings (P/E) of over 50 while nine companies trade above 100 times, a report by Kotak Institutional Equities (KIE) said. A company with a 100 times PE would need 83,000 times earnings in the 100th year to justify its current multiple. Many of these high PE stocks belong to traditional sectors and could face significant disruption risks, the report said.

Cautioning investors on the “unsustainable” valuations of Indian stocks, KIE has pointed out that valuation methodologies have little or no correlation to fundamentals. Stock prices, strategists at the brokerage said, have been driven up to stratospheric levels thanks to a sense of complacency and an obsession with narratives.

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