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How to Calculate SENSEX Earnings / EPS ?

Wednesday, June 25, 2008

Many have always wondered how to calculate the Earnings / EPS of Bombay Stock Exchange's 30 stocks benchmark Index - the SENSEX. It is a very easy and the process is highlighted below.

The EPS of Sensex is the sum of all the individual companies EPSs considered on a pro-rata basis on the available floating stock of the company.

Lets analyze what does this mean, First, have the list of 30 companies which constitute the SENSEX in a spreadsheet. Or download the spreadsheet from BSEIndia.com. Now, all you need to do is get individual EPS of each company independently. This EPS must be taken on a pro-rata basis depending on the availability of the free float for calculating the BSE Sensex EPS. (i.e non-promoter holding, it is readily given by BSEIndia) Make another column in your spreadsheet and multiply the EPS the company reported by the Adjustment Factor.

For example, lets consider ACC. ACC reported an EPS of Rs 72.70 for FY-2008. The Adjustment Factor for ACC is 0.60, means 60% of ACCs stock is free floating stock [or non-promoter non-locked in stock] Multiplying 72.70 * 0.60 = Rs 43.62 is ACCs contribution to SENSEX EPS.

We are attaching the Spreadhseet for your ready reference which you can download and use it in every way you want to. Kindly feel free to post any questions you have in mind.

5 Comments:

At Friday, June 27, 2008 7:44:00 PM IST, ris said...: The current excel sheet contains wrong data for free float. The method is correct but the free float data is wrong to calculate the sensex eps.
At Friday, June 27, 2008 11:21:00 PM IST, Webmaster said...: I have used the data provided by http://www.bseindia.com/downloads/about/INDICES.zip
and hence it is should be error-free.
At Saturday, June 28, 2008 12:10:00 PM IST, rk said...: using your data the PE comes to 15 .what is historical pe say for last 10 years
At Saturday, June 28, 2008 12:29:00 PM IST, Anonymous said...: Can you please provide a similar spreadsheet for calculation of Nifty's EPS?
At Monday, June 30, 2008 10:15:00 AM IST, Anonymous said...: RK,

Here is historical forward P/E for SENSEX since 1990,

http://www.dalalstreet.biz/2008/05/bse-sensex-1990-to-2008.html