Stock Market
Intermediate
P/E Ratio (Price-to-Earnings)
💡 In plain English: How much you're paying per rupee of a company's earnings — a key measure of whether a stock is cheap or expensive.
Definition
The ratio of a company's share price to its earnings per share (EPS), used to compare valuations.
📌 Real-World Example
Stock price ₹500, EPS ₹20 → P/E = 25. This means investors are paying ₹25 for every ₹1 the company earns. Nifty 50's long-term average P/E is ~20.
🔢 Formula
P/E = Share Price / Earnings Per Share (EPS)
Related Terms
Bull Market
When stock prices are rising broadly — investors are optimistic and buying.
Market Capitalisation
The total value of a company's shares — price × number of shares =...
Earnings Per Share (EPS)
How much profit a company made per share — the single most-watched...
Blue-Chip Stock
Shares of large, well-established companies with a long track...
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