Top 14 Most Expensive (High Valuation) Stocks in India [2022]

In Share Market, many factors like Liquidity conditions, earnings of company, Future growth Prospects influence the share price of a company. If most of the reasons are in favour of a company and there is a good demand from Institutional Investors, its stock might see an exponential rise in its valuations.

After 2020 crash, market has seen amazing rally. Many stocks have turned quite expensive while few were always expensive. In this article, we are going to take a look at these kind of stocks.

What kind of Expensive Stocks have been discussed?

PE or Price to Earnings ratio of these companies is comfortably moving above 100. Beside of PE, Price to Book and Price to Sales ratios are also hovering at very higher levels.

Since the arrival of covid, our economy has gone through a series of restrictions in 2020 and 2021. In these 2 years, many companies had reported temporary losses or decline in their earnings which is unlikely to last when the economy would normalise again. Therefore, there are high chances of many companies initially looking expensive if we see at just their PE ratio.

This ratio is calculated by using current earnings of the company. That’s why, adjusted PE ratio of the companies has been taken that gives a much better picture.

In our list of Most Expensive Stocks in India, we have avoided adding those stocks where Market Capital is below ₹10,000 crore. PE, Price to Sales and Price to Book ratios and Market Capital are some of the criteria used to create this list.

List of Most Expensive Stocks in India

Avenue Supermarts Stock

Avenue Supermarts is primarily engaged in the business of organized retail and operates supermarkets under the brand name of D-Mart. Promoter of the company is Radhakishan Damini who is a well known investor in Indian Stock Market.

Some of the reasons why Avenue Supermarts share price is so expensive

• Radhakishan Damini (Promoter) is holding nearly 75% shares of the company. Only 25% shares are available with the Investors. Considering the demand of company among Big Investors, 25% shares seems little less for them.
• In last 5 years, Revenue of company grew by over 23% annually. Profit too grew with similar rate.
• Company uses almost Zero Debt to fund its Growth Projects. Zero Debt + Good Growth are favorite spots of Institutional Investors.

IRCTC Stock

If you have travelled through Train or even has visited Railway Station, you would know what IRCTC basically does. It manage the catering and hospitality services at stations and on trains. IRCTC is the only authorised player by Indian Railways to book Railway tickets online.

Under travel and tourism segment, it offers various services such as Domestic Tour packages, Air tickets and Corporate Travel, Luxury Travel, Mass Tourism, and Outbound Tour Packages.

Company also sells Rail Neer, a branded packaged drinking water for the rail commuters. It is available on all trains and stations within the Indian Railways network.

Indian Railway Catering and Tourism Corporation (IRCTC) is a “Mini Ratna” Enterprise comes under the Ministry of Railways. It was incorporated on 27th September, 1999.

IRCTC operates monopoly business because no one else is allowed to book Railway Tickets online. They are secured from any Big competition.

However, this Monopoly business is only because of Government’s Policies. Any adverse change in regulations in future might change the monopolistic nature of business.

Overall, considering where IRCTC is trading right now, it seems like Institutional Investors still loves this business of company a lot.

Trent Stock

Trent is one of the leading players in the branded retail industry in India. Headquartered in Mumbai, company is a part of one of the most Trustable Promoters, Tata Group. It primarily operates stores across four formats: Westside, Star, Landmark and Zudio.

Westside offers apparel, footwear and accessories for men, women and children, along with furnishings, decor and a range of home accessories. It offers products in approximately 60 cities through its chain of 90 stores.

Star hypermarket and convenience store chain offers a range of products, including staple foods, beverages, health and beauty products, apparel, home furnishings, vegetables, fruits, dairy and non-vegetarian products. It operates through 60 stores across 7 cities.

Zudio store offers collection of exclusively designed menswear, womenswear, ethnic wear, kidswear and footwear accessories at competitive prices. The company has established 133 Zudio stores across 57 cities.

Landmark is a family entertainment format that offers a range of toys, front-list books and sports merchandize.

From 2010 to till date, sales of Trent has grew by 12.7% annually that seems a good growth rate. Shares of many Trusted Retailers (like DMart) are trading at High valuations. That could be one of the reasons why Trent also has hefty valuations.

For future, company has plans to increase its store count across different formats. This would help company in gaining more revenues and increase its profits.

Max Health Stock

Today, Max Healthcare Institute is one of India’s largest healthcare organizations. They operate 17 healthcare facilities (3400+ beds) across the NCR Delhi, Haryana, Punjab, Uttarakhand and Maharashtra. Almost 85% of the bed capacity is in Metro/Tier 1 cities.

Apart from hospitals, Max Healthcare also operates a homecare business and pathology business under brand names Max@Home and Max Labs respectively. Max@Home offers health and wellness services at home while Max Lab provides Pathology Services outside the hospital network.

Radiant Life Care acquired 49.7% stake in Max Healthcare from South Africa’s Life Healthcare. Then, Radiant Healthcare business was merged into Max Healthcare. The amalgamated (merged) entity assumed the name Max Healthcare Institute limited.

As of now, Abhay Soi is the Chairman and MD of the Max Healthcare. Prior to the amalgamation, Abhay Soi was managing Radiant Life Care.

Merger of Max Healthcare with Radiant and subsequent listing of the shares, KKR entry into the company and improved growth aspects are some of the reasons that have led to re rating of the Stock. Prior to amalgamation, KKR (American global Investment company) was holding a significant chunk in Radiant Life Care.

With New Management and change in Promoters, investors are expecting a lot of improvement in financials of the company over long run.

ABB India Stock

ABB India is one of the leading engineering companies in Power and Automation Technologies. It undertakes projects in the field of electrical distribution, power grids and plants, machinery components, and other industrial applications. Robotics, Power, Heavy Electrical Equipment, and Automation Technology are the key business segments of the company.

Promoter of ABB is a Switzerland based Group. From 2010 to 2019, there has been no major growth in the business of company. Revenue grew by marginally 2% annually whereas profit has almost nil or zero growth.

However, it has been seen many times in the Indian Stock Market that companies which are owned by a well known Foreign Company generally trades at a healthy price. Interest of Institutional Investors generally stay high in such companies.

It happens because manipulation risks in Financial Accounts of such companies always remain very low. Whatever their Indian based company earns, Foreign Promoters tend to distribute that profits among the shareholders in best possible ways.

Beside of these factors, such companies have access to superior technology, more defined business model, and have higher budgets. Moreover, as their parent companies have been in the business for a longer time, they also have good experience in running a company smoothly. Worldwide, they may have a good reputation and brand image.

Another possible reason for its high share price could be its Shareholding Pattern. Promoters are holding 75% shares in the company. As per SEBI rules, promoters are not allowed to own more than 75% shares in their companies listed on exchanges.

When Promoter holding is around 75%, only 25% or 1/4 part of th shares are freely available in the market. Sometimes, due to this low public holding in the share, it can result in higher price of the stock.

Currently, PE ratio of the company is hovering above 100 even when there is no significant growth in the business. Imagine what would happen with the share price of ABB India when there will be any good growth in the financials🤔😐

Relaxo Footwears Stock

Even if you are not an investor of this company, i guess you would probably know about the Product Portfolio, business modal and much more about them.

Incorporated in 1984, Relaxo Footwear is the largest footwear manufacturer in India. Its most popular brands – Relaxo, Sparx, Flite & Bahamas are a leader in their space. Having a pan India distribution footprint, Relaxo also operates a 350+ strong network of own retail outlets, with availability on all major e-commerce portals as well.

A basic characteristic that was common in most of the Expensive stocks discussed above is present in Relaxo Footwear too! Promoters hold nearly 71% shares of their company.

That is one of the reasons why share price has been able to reach current height and turned out as one of the most expensive stocks of India.

Higher Growth Rate in business is another characteristics of Expensive stocks. This also exist in Relaxo Footwear company. Between 2010 to 2020 period, revenue of company grew by 13% annually. During same period, Profits grew with much better rate i.e 18% annually. Higher growth rate of Profits can be due to Economies of Scale.

Sona Comstar Stock

Sona Comstar or Sona BLW Precision Forgings is a Auto Component manufacturer, generating major part of revenues from Export Business. Company designs, manufactures and supplies mechanical and electrical hardware systems, components as well as base and application software solutions for Automotive Players.

It develop components such as Differential Assemblies, Differential Gears, Conventional and Micro-Hybrid Starter Motors, BSG (Belt driven Starter generator) systems, EV Traction Motors (BLDC and PMSM) and Motor Control Units to automotive OEMs across US, Europe, India and China, for both electrified and non-electrified powertrain segments.

Whatever hardware installed below your car seats compose Powertrain segment. It may include engine, transmission, driveshaft, axles, and gears etc.

As on September 2021 end, order book of Sona Comstar stood at Rs 13,600 crore of which 58.5 percent projects were linked to Electric vehicles. In last 5 years, company has delivered nearly 17% CAGR growth in its revenues. As per last quarterly results and projection of management, this growth rate is likely to improve further in near future.

Strong Research & Development (R&D) capabilities, continued capital expenditure by company to expand manufacturing capacities and clear connection with EV space (proxy play) seems to be some of the reasons for its Expensive price.

National Standard Stock

National Standard is presently engaged in the business of Real Estate Development. Macrotech Developers (Lodha Group) is the promoter of this company. As per company’s website, they have undertaken a residential project by the name of Lodha Grandezza in the central business district of Thane, Wagle Estate.

The Project comprises twin 18 storey residential towers in a mixed use development with three commercial Supremus towers comprising of chic boutique offices with spaces in the range of 2,000 square feet to 20,000 square feet. The target client profile of this project is the higher/upper middle income segment of the market.

As of now, Market Capital of National Standard is nearly ₹20,000 crore. But regular annual sales are just ₹30 crore! Plus, there is no growth story in the business. Revenues are flat from a long time.

Then why stock is still so Big?

If you check the Shareholding pattern, Promoters own 73.94% shares in the company. Fixed Group of people own 24.51% shares. Less than 1.55% shares are available in the market.

Considering all facts, it purely seems the game of Operator and Low Free Float! Hardly any shares are available in the market to help represent the correct value of National Standard in stock market.

Happiest Minds Stock

Happiest Minds is a IT company working in segments like Artificial intelligence, Blockchain Technology, cloud Computing, digital process automation, internet of things (IoT), robotics/drones, security, virtual/augmented reality. Nearly 97% revenues of company are coming from Digital Technologies, with strengths in cloud and Enterprise SaaS (Software-as-a-Service) space.

Company was founded by Ashok Soota, who is one of the pioneering leaders in the Indian IT industry. In his career, Ashok Soota led Wipro’s IT business for fifteen years. Then, co-founded Mindtree and worked as Chairman & MD there, a company he also led to a very successful IPO.

Why Happiest Minds stock is expensive?

• Since the Digital Technologies space is growing at 15-20% CAGR and has picked up more pace after lockdown, it could be favoring Happiest Mind share price. IoT, Cloud Computing or Blockchain kind of Technologies are expected to see significant demand going forward.
• Investors might be seeing leadership position of Happiest Minds in strong hands! Ashok Soota has credible track record with 30 years of experience in IT Industry.
• Happiest Minds was established on 2011. From Zero revenue, Annual Revenue of Happiest Minds is around 850 crore today. Even after 2015, revenue of company is comfortably growing with 15-20% CAGR.

Clean Science Stock

Clean Sciences and Technology is a recently listed (listed in July 2021) company. They works in Fine & Specialty chemical segment. Nearly 70% revenues are derived from Performance chemicals (MEHQ and BHA) that it produces. In these chemicals, profit margins are quite good.

Rest of the revenues are generated from Pharmaceutical Intermediates, FMCG chemicals and other few chemical segments.

Demand for chemical companies in Indian stock market has seen a big jump after China +1 theme picked up pace. All over world, companies are looking for alternative sources of supply that are currently coming from China. That is really helping a lot to many Indian chemical companies.

Why Clean Science trading at high valuations?

Clean Sciences has the best Return Ratios in Specialty chemical space. EBITDA margins of over 50% and Net Profit Margins of over 30% really makes them a high Profitable company.

Despite of operating in comparatively small Industries, Clean Sciences has delivered a remarkable growth! In last 5 years, Revenue has grown at nearly 30% CAGR while Profit has increased 50%.

Higher growth speed of profit than Revenue indicates that Economies of scale is working for the company. As they are producing more and more quantity of the chemicals, their costs are not going up in similar mode and therefore, profits are rising faster.

Jubilant Foodworks Stock

Jubilant Foodworks is another share whose PE (Price to Earning) ratio is comfortably moving above 100. If you don’t track stock market much and is not an investor of this company, then you can really find it difficult to figure out what this company actually does?

Domino’s which is a popular brand of Pizzas in India, is managed by this company. Jubilant Foodworks has exclusive rights to operate Domino’s Pizza Brand in India. Beside of India, company has these rights in Bangladesh, Nepal and Shi Lanka also. They also have exclusive rights to operate Dunkin Donuts in India.

In India, there are more than 1000 Domino’s Restaurants which are run by Jubilant Foodworks. Pizza business of this company has turned so big that today, most of the earnings are coming from this source only.

In last 10 years, Revenue and Profits of company grew by nearly 19% and 15% annually, respectively. It means company has been able to achieve a good growth over long term. From here too, Jubilant stock has good potential to keep rising in future.

Indigo Paints Stock

Indigo Paints is engaged in manufacturing different types of decorative paints like emulsions, enamels, wood coatings, primers, distempers, putties and cement paints.

Company has joined the stock market in recent time. IPO had seen a grand subscription. Same happened with listing too. But since its entry, demand for company’s shares has been little subdued and price has seen some correction. However still today, its PE is well above 100. Therefore, it is among the most expensive stocks of India in terms of valuations.

Before Indigo Paints, whichever company we have seen above were mostly offering 10-25% growth in the business annually. But this company offers you a much better growth rate!

In last 10 years, sales of company has grown by over 35% annually which is really impressive. However, does it justify 140+ PE ratio?

No doubt it is very high. But its peers like Berger Paints or Asian Paints too have PE of around 100. Indigo Paints has delivered much better Growth than these companies. So, it is quite obvious that it can have a very high PE.

But weather it truly deserves 140+ PE or not can only be found upon the detailed analysis of the company. And here, we are not doing this thing. We are just discovering those stocks which are currently trading at 100+ PE.

HDFC Life

Established in 2000, HDFC Life is a leading long-term life insurance solutions provider in India, offering a range of individual and group insurance solutions that meet various customer needs such as Protection, Pension, Savings, Investment, Annuity and Health.

HDFC Life Insurance Company is a joint venture between HDFC Limited and Standard Life Aberdeen, a mauritius based global investment company. As on September 30, 2021, the Company had 38 individual and 13 group products in its portfolio, along with 7 optional rider benefits, catering to a diverse range of customer needs.

So far, we have discovered that most of the Expensive stocks always have Good Growth numbers and Better Future. Otherwise, why anyone would pay a higher price for the stock??

Beside of Growth Potential, Risks & Stability in the business, shareholding pattern, any competitive edge and many more factors influences share price a lot.

HDFC Life seems to have favorable support from most of these factors. That’s why, its share price is trading with 100+ PE which makes it another Expensive stock of India.

Apollo Hospitals

Apollo hospitals operates a network of private hospitals in India. It also operates primary care and diagnostics clinics as well as telemedicine units and offers health insurance, education and training, and research services.

Apollo earns more than 50% of its revenues from healthcare business. Pharmacy busines contributes the second largest portion to its revenues.

In last 10 years, Revenue (Topline) of the company has grown by over 15% annually that seems really impressive. However, profit has not witnessed similar growth but yes, it has grown too!

Promoters hold nearly 30% shares of the company. Foreign Investors hold nearly 50% shares. Remaining shares are either with Domestic Institutional Investors or Public.

If we deduct one time gains of June 2021 quarter, then PE ratio of Apollo Hospitals is comfortably hovering above 100. Clearly, investors like this company a lot. That’s why, PE level is so high.

In 2021, Apollo Hospitals moved its backend pharmacy business, Apollo 24/7 and other associated brands into a new entity, Apollo HealthCo. This move is expected to be fruitful over long term.

So, these were the Expensive stocks of Indian Stock Market that are with hefty valuations in. Behind their high valuations, there are some reasons too. We tried to discussed some of these reasons for all the companies in the article.

That is end of this article.

Good luck : )