PE Ratio of NIFTY 50
Historical NIFTY PE Ratio chart
What is PE Ratio?
Understanding the Price-to-Earnings Ratio
The Price-to-Earnings (PE) Ratio is a key financial metric used to value a company's stock. It is calculated by dividing the current market price of a stock by its earnings per share (EPS). For indices like NIFTY 50, it represents the weighted average PE of all constituent stocks.
A higher PE ratio suggests that investors are expecting higher earnings growth in the future compared to companies with a lower PE ratio. However, a high PE ratio could also indicate that a stock is overvalued. The NIFTY 50 PE Ratio provides insights into the overall valuation of the Indian stock market.