Graham Number screen: Indegene, LIC Housing lead value list

Middle East risk premiums have not disappeared. They have simply moved into the shadows of Indian equity valuations. On October 20, a Graham Number screen of NSE-listed companies threw up an unusual list: a healthcare technology firm and seven financials trading below their accounting-derived value. The screen is simple. Graham Number equals the square root of 22.5 times earnings per share times book value per share. When the current price sits well below that number, the stock has a margin of safety. [Indegene](/stock/INDGN) (NSE: INDGN) closed at ₹555.80 against a Graham value of ₹1,278.09. That is a 61.2% discount. [LIC Housing Finance](/stock/LICHSGFIN) (NSE: LICHSGFIN) closed at ₹500 against a Graham value of ₹1,217.57, a 58.9% discount. Those numbers look compelling. But the screen is a blunt instrument. It does not ask why the market has priced these companies so far below book-plus-earnings value. For Indegene, the answer sits partly in US healthcare spending concerns and partly in post-IPO lock-in dynamics. For the financials, it sits in credit costs and rate expectations. Graham Number screen: what the discount really measures A 61.2% margin of safety on Indegene sounds attractive until you ask why the market left it there. The formula uses reported earnings and book value. It does not capture regulatory shifts in US drug pricing or client concentration risk. Indegene's revenue depends heavily on life sciences companies outsourcing commercial operations. If American healthcare budgets tighten, the earnings assumption inside the Graham value weakens. The discount may not close by price rising; it may close by the Graham value falling. If the 10-year US Treasury yield stays above 4.5%, Indian financials may face higher funding costs. If Brent crude stays above $75, inflation assumptions shift. The margin of safety on paper could be smaller in practice. Margin of safety in Indian financials The list also includes [Sammaan Capital](/stock/SAMMAANCAP) (N...