The situation
A stock previously traded at ₹300. A revised model supports earnings of ₹12 per share and a defensible 16–19× multiple range. The stock now trades at ₹240.
Your task
Build a fresh range and assess the old-price argument.
Reveal step-by-step solution
Set up the problem
Use earnings and comparable multiples to build the range independently of the price history.
Work through the numbers
₹12 × 16 = ₹192. ₹12 × 19 = ₹228.
Interpret the result
₹240 is above the modeled range even though it is 20% below ₹300. Test whether revised earnings or the peer range could justify the price.
What to remember
Write an independent estimate before comparing with management guidance or a previous price.