Appreciation wave

Tata Motors’ market capitalization briefly surpassed that of Maruti Suzuki India Ltd (MSIL) last week, making the Tata company the most valuable listed car company in India. MSIL’s share price has since risen enough to regain its top position. The moves in these two stocks illustrate an interesting quirk in valuation. While stock prices do indeed depend on earnings prospects, investors are generally willing to bet more on a potential turnaround in a loss-making company than on one that is already doing well. In the last twelve months, MSIL stock has risen 19.6 percent

First print: February 6, 2024 | 11:01 PM IST