Educational Purpose Only: P/E ratios vary by industry. Always compare within the same sector.
How it works
The Price-to-Earnings (P/E) ratio is one of the most widely used valuation metrics in stock analysis. It tells you how many rupees investors are willing to pay for each rupee of a company's earnings. A low P/E may suggest a stock is undervalued, while a very high P/E may indicate that the market is pricing in high future growth — or that the stock is speculative.
Use the "Find Fair Value" mode to work in reverse: if you believe a stock deserves a certain P/E multiple based on industry averages or growth expectations, enter that P/E and the EPS to see what price would be fair.
P/E benchmarks by sector (India)
| Sector | Typical P/E Range |
|---|---|
| IT / Technology | 25–50x |
| FMCG / Consumer Staples | 35–60x |
| Pharmaceuticals | 20–40x |
| Banking (Private) | 15–25x |
| Banking (PSU) | 5–12x |
| Commodities / Metals | 5–15x |
Frequently Asked Questions
What is the P/E ratio?
The Price-to-Earnings (P/E) ratio is the current stock price divided by the earnings per share (EPS). It tells you how many rupees investors pay for each rupee of earnings. A P/E of 20 means investors pay ₹20 for every ₹1 of annual earnings. It is one of the most widely used valuation metrics in equity analysis.
What is a good P/E ratio?
There is no universal 'good' P/E — it is highly sector-dependent. Technology and high-growth companies often trade at P/Es of 40–80x. FMCG and consumer staples trade at 30–50x. Banking and financial stocks at 10–20x. Commodity and cyclical companies at 5–15x. Always compare a stock's P/E to its own historical average and to peers in the same sector.
What is the difference between trailing and forward P/E?
Trailing P/E uses the actual earnings from the last 12 months (LTM/TTM) — it is based on reported, historical data. Forward P/E uses analyst estimates for the next 12 months. A falling forward P/E relative to trailing P/E indicates expected earnings growth, which may justify a higher current valuation.
Can P/E be negative?
Yes. If a company reports a net loss (negative EPS), the P/E ratio will be negative — which makes it meaningless for valuation. In such cases, analysts use Price-to-Sales (P/S), EV/EBITDA, or Price-to-Book (P/B) ratios instead.
What is PEG ratio and how does it improve on P/E?
The PEG (Price/Earnings-to-Growth) ratio divides the P/E ratio by the expected EPS growth rate. A PEG below 1 suggests the stock may be undervalued relative to its growth prospects. For example, a stock with a 30x P/E but 30% expected earnings growth has a PEG of 1, which is considered fairly valued.
Related Calculators
This calculator is for educational and illustrative purposes only. P/E ratios vary significantly across industries and should be compared within the same sector. This tool does not constitute investment advice.
About P/E Ratio Calculator
Calculate the price-to-earnings ratio to gauge whether a stock is fairly valued relative to its earnings. Use the reverse mode to find a stock's fair value from its EPS and expected P/E multiple. This tool is designed to be simple and accessible for users who need quick, reliable results.
When to use this tool
Use the p/e ratio calculator when you need an accurate, immediate calculation without installing software or registering an account. It is especially useful for everyday decisions, quick comparisons, and planning where you need numbers fast.
How it works
The calculator applies standard, well-known formulas and conventions appropriate to the domain. Results are computed instantly in your browser to preserve privacy and avoid sending personal data to servers.
Limitations and tips
This tool provides informative estimates and is not a substitute for professional advice. For complex or high-stakes decisions, verify results with a qualified professional. Double-check inputs such as units, dates, and currency settings before making decisions.