Piotroski 8/9 Meets Low P/E at Banks, ITC, NTPC

A Piotroski 8/9 reading across eight Nifty heavyweights is unusual. It is even more unusual when the same screen includes [HDFC Bank](/stock/HDFCBANK) (NSE: HDFCBANK), [State Bank of India](/stock/SBIN) (NSE: SBIN), [TCS](/stock/TCS) (NSE: TCS), [Infosys](/stock/INFY) (NSE: INFY), [Kotak Mahindra Bank](/stock/KOTAKBANK) (NSE: KOTAKBANK), [Axis Bank](/stock/AXISBANK) (NSE: AXISBANK), [ITC](/stock/ITC) (NSE: ITC) and [NTPC](/stock/NTPC) (NSE: NTPC). The Piotroski F-Score checks nine binary signals. They cover profitability, balance sheet quality, liquidity and operating efficiency. Eight of nine means financial statements are improving, not just holding up. The market, however, prices these names on two different stories. [State Bank of India](/stock/SBIN) trades at 11.42 times trailing earnings with a 15.2% return on equity. [TCS](/stock/TCS) posts a 47.7% ROE and a 64.6% ROCE. One is treated as a value trap. The other is treated as a compounder. That gap is the opening for valuation-centric investors. The macro backdrop adds pressure. If US rates stay elevated, foreign institutional flows into Indian financials could remain thin. That hurts [HDFC Bank](/stock/HDFCBANK) and [Axis Bank](/stock/AXISBANK) even when their credit books are improving. If global IT spending slows further, [TCS](/stock/TCS) and [Infosys](/stock/INFY) could face multiple compression despite their F-Score strength. A high F-Score does not override the rate and demand cycle. Piotroski 8/9 in Banks, IT and Power Four of the eight names are lenders. The F-Score for banks is not a simple profitability screen. It punishes rising debt and rewards operating cash flow relative to net income. [HDFC Bank](/stock/HDFCBANK) has spent years digesting its merger. [State Bank of India](/stock/SBIN) has improved return ratios without stretching its balance sheet. [Kotak Mahindra Bank](/stock/KOTAKBANK) and [Axis Bank](/stock/AXISBANK) show stable asset quality. The common thread is earnings quality improv...