The stock price of Escorts Ltd has risen by over 20 percent this month and around 107 percent this year so far. From the 52 week low, it is up 150 percent and it is at its fresh 52-week high and also an all-time high for the stock.
There are a lot of factors behind the rally. The street is betting on the tractor segment recovery to continue. Escorts Ltd expects second-half growth to be about 12 percent. The street is positive on margin expansion in FY22 as well. All this makes it trade at 17 times FY22 EPS.
Now the issue here is for that you are pricing in an earnings growth of about 40 percent.