Stocks With Low Book Value Z-Score, Robust Fundamentals Set To Outperform As ‘Value Rotation’ Likely To Continue: ICICI Securities  

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Value stocks started to outperform in a sustained way in FY21 after a decadal underperformance: Price to book Quintile performance within BSE200 universe: Q1 (highest P/B) up 50%, Q2 up 92%, Q3 up 106%, Q4 up 113%, and Q5 (lowest P/B) up 157%.

Similarly, the MSCI Value index has outperformed by 12% since October 2020 (MSCI Value up 23% versus MSCI Growth up 10%).

Despite the rally and bull market environment, the chasm between value and growth still remains at a two-decade high both in the global context (PB premium of MSCI Growth over MSCI Value) and for Indian markets (PB premium of Q1 over Q5).

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ICICI Securities Strategy .pdf


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