P/E Ratio Calculator
for Indian Stocks
Instantly calculate the Price-to-Earnings ratio of any stock. Compare valuations, spot over- or under-valued companies, and benchmark against sector averages.
P/E Ratio
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The Basics
What is the P/E Ratio?
The Price-to-Earnings (P/E) ratio tells you how much investors are willing to pay for every rupee of a company's earnings. It is one of the most widely used valuation metrics for Indian stocks — helpful for quickly comparing companies within the same sector.
The formula is simple: P/E = Current Market Price ÷ Earnings Per Share. A P/E of 20 means investors are paying ₹20 for every ₹1 of annual earnings.
Low P/E
May indicate undervaluation or low growth expectations. Common in mature sectors like banking and PSU stocks.
High P/E
Often signals growth expectations. FMCG, IT and new-age tech stocks regularly trade at elevated multiples.
Benchmarks
Sector-wise Average P/E (India)
A high P/E in one sector may be perfectly normal in another. Use these rough benchmarks when comparing.
| Sector | Average P/E |
|---|---|
| IT Services | 25x |
| Banking & Financials | 15x |
| FMCG | 45x |
| Automobile | 20x |
| Pharmaceuticals | 30x |
Indicative averages. Actual values change with market conditions.
FAQ
Common Questions
What is a good P/E ratio for Indian stocks?
There is no universal "good" P/E — it depends on the sector and growth outlook. A P/E of 15-25 is typical for the broad market, but FMCG and IT stocks often trade at 30-50x. Always compare against the sector average and the company's own historical range.
How is P/E ratio calculated?
P/E = Current Market Price ÷ Earnings Per Share. You can also calculate it at a company level as Market Capitalisation ÷ Net Profit. Both produce the same result when TTM earnings are used.
What is the difference between P/E and PEG ratio?
P/E looks only at price versus earnings. PEG divides the P/E ratio by the earnings growth rate, giving a growth-adjusted view. A PEG below 1 is often seen as attractive, while PEG above 2 suggests expensive growth.
Forward P/E vs Trailing P/E — what is the difference?
Trailing P/E uses the last 12 months of reported earnings. Forward P/E uses analyst estimates for the next 12 months. Trailing P/E is factual but backward looking; forward P/E is forward looking but depends on estimate accuracy.
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