Piotroski 8/9 Scores Meet Undemanding Valuations

Eight companies. One score. A Piotroski 8/9 score is not a forecast. It's a balance sheet audit wrapped in nine yes/no questions. The latest screen puts [HDFC Bank](/stock/HDFCBANK) (NSE: HDFCBANK), [State Bank of India](/stock/SBIN) (NSE: SBIN), [Tata Consultancy Services](/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) in the same bucket. P/E ratios mostly sit between 10 and 19. In short, Piotroski 8/9 scores meet undemanding valuations. Quality at a price. That's what the screen says. But screens are not investment theses. They are filters. An F-Score of 8/9 means seven or eight of the nine checks pass. It says nothing about the next quarter's earnings. It says nothing about what the market will pay. It asks whether the balance sheet is getting better or worse. That's it. Piotroski 8/9 Scores: What the Screen Actually Says Joseph Piotroski's F-Score awards points for improving profitability, falling debt, rising asset turnover, and positive operating cash flow. A score of 8 or 9 is rare among large caps. Most Nifty 50 companies carry too much debt or buy back shares with borrowed money. When eight names score 8/9, the market is telling you something: either these companies are in good shape, or accounting is slow to reflect the next downturn. The list leans toward banks and IT. Four banks, two IT companies, one consumer staples firm, one utility. That mix matters. Banks are balance sheet businesses. IT firms are cash conversion machines. ITC and NTPC sit at opposite ends of capex intensity. The common thread is not sector. It's that earnings quality held up through a difficult three years. Bank Stocks With Piotroski 8/9 Scores and Low Multiples Banks have been a consensus short in India for three years. Deposit costs rose faster than loan yields. Unsecured retail credit soured. M...