Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Price-to-Earnings ratio compares a company's share price to its earnings per share, indicating how much investors pay for each rupee of profit.
P/E tells you if a stock or index looks expensive or cheap relative to its profits. Higher P/E often means higher growth expectations.
Trailing P/E uses past 12-month EPS; forward P/E uses estimated future EPS. Sector norms differ — IT may trade at higher P/E than utilities. Index P/E aggregates constituent weights.
If Reliance Industries trades at ₹2,900 and EPS is ₹100, P/E is 29. An investor pays ₹29 for every ₹1 of annual earnings.
P/E Ratio = Market Price per Share ÷ Earnings per ShareThere is no universal threshold. Nifty 50 historical P/E has ranged roughly 15–25; comparing within sector and growth outlook matters more.
Yes, when EPS is negative due to losses, P/E is not meaningful. Use other metrics like price-to-book or cash flow instead.
Not necessarily. Low P/E can signal weak growth, governance issues, or cyclical troughs that may worsen.