PE Ratio (Price to Earnings)

How many rupees you pay for every ₹1 the company earns in a year.

Share price divided by earnings per share. A PE of 25 means you are paying ₹25 for each ₹1 of annual profit — so, at today's profit, it would take 25 years of earnings to get your money back.

A high PE is not automatically "expensive". It usually means investors expect profits to grow. The risk is that if that growth does not arrive, the price has further to fall.

PE is only meaningful in comparison — against the same company's own history, and against other companies in the same industry. A bank and a software firm normally trade at very different PEs, and neither is wrong.

A share costs ₹2,182 and earned ₹39.51 per share last year. PE = 2,182 ÷ 39.51 = 55. You are paying ₹55 for each ₹1 of yearly profit.

Under ~15 — cheap on the face of it, but check *why* the market is unexcited

15 to 30 — the ordinary range for most established Indian companies

Above ~40 — the price already assumes strong growth for years to come

A PE calculated from an old stored price is misleading after a sharp move. Supath recomputes it from the latest close when the two diverge, and says so. Also, a company with tiny or negative profit can show an absurd PE or none at all — that is a quirk of the arithmetic, not a bargain.

Analysis only: Supath AI does not give investment advice. Consult a SEBI-registered financial advisor before making investment decisions.