Piotroski 8/9 Screen: Quality at Low Valuations

Piotroski 8/9 screen flags eight large caps Eight Indian large caps now pass eight of nine checks on the Piotroski 8/9 screen, according to FairStock.ai screening data. The list includes [HDFC Bank](/stock/HDFCBANK) (NSE: HDFCBANK), [State Bank of India](/stock/SBIN) (NSE: SBIN), [Tata Consultancy Services](/stock/TCS) (NSE: TCS) and [Infosys](/stock/INFY) (NSE: INFY). It also includes [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 screen's valuation spread runs from 10.39 times earnings for NTPC to 19.16 times for Kotak Mahindra Bank. TCS and ITC post return on equity above 47%, per FairStock.ai data. That combination of profitability and contained multiples rarely appears in one screen. Global money managers have paid headline multiples for Indian growth for years. That changed as US rates stayed higher for longer. The 10-year Treasury yield above 4% has made emerging market risk more selective. Foreign portfolio investors no longer buy every quality franchise at any price. They want proof of balance sheet repair and cash generation. This screen supplies exactly that. What the screen says about banks and IT The four bank names in the screen tell a story of balance sheet normalization. HDFC Bank, SBI, Kotak Mahindra Bank and Axis Bank have spent years improving provision coverage and reducing stressed assets. The Piotroski checks capture higher operating cash flow and lower debt ratios. Banks do not have gross margins in the conventional sense, but net interest income growth and return on assets still feed the scoring. SBI's discount to private peers remains wide, while HDFC Bank's valuation has compressed since the mortgage book merger. The screen suggests both are being priced for slower earnings, not for the current book quality. IT presents a different profile. TCS and Infosys pass eight checks despite a difficult global technology...