When close to half the companies in India have price-to-earnings ratios (or “P/E’s”) above 31x, you may consider Tourism Finance Corporation of India Limited (NSE:TFCILTD) as an attractive investment with its 15.5x P/E ratio. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the reduced P/E.
Tourism Finance Corporation of India has been doing a good job lately as it’s been growing earnings at a solid pace. It might be that many expect the respectable earnings performance to degrade substantially, which has repressed the P/E. If you like the company, you’d be hoping this isn’t the case so that you could potentially pick up some stock while it’s out of favour.
