P/E Ratio Calculator
Price-to-Earnings — Stock Valuation Tool

There is no single "good" P/E ratio — it depends entirely on the sector, growth rate, and market conditions. A P/E of 10× is cheap for FMCG but fair for PSU utilities. A P/E of 40× is expensive for a slow-growth bank but reasonable for a high-growth tech company. Always compare P/E against: (1) the company's own historical P/E range, (2) sector peers, and (3) the PEG ratio to account for growth.

A negative P/E ratio means the company has negative earnings (net loss). The P/E ratio becomes mathematically meaningless when EPS is negative — you can't meaningfully say a stock is "30× earnings" if those earnings are a loss. For loss-making companies, investors use alternative metrics like Price/Sales (P/S), EV/EBITDA, or Price/Book (P/B) depending on the stage of the business.

PEG Ratio = P/E ÷ Earnings Growth Rate. It accounts for growth when evaluating valuation. A stock with P/E 30× and 30% growth has PEG = 1.0 (fairly valued). A stock with P/E 30× and 10% growth has PEG = 3.0 (expensive relative to growth). Peter Lynch popularized PEG: PEG < 1.0 = potentially undervalued, PEG 1–2 = fair, PEG > 2 = expensive. Our calculator shows PEG automatically.

Indian FMCG stocks (HUL, Nestle India, Britannia) historically trade at 50–80× P/E, which seems extreme by global standards. Reasons: (1) India's massive consumption story with 1.4 billion population and rising middle class, (2) high barriers to entry and brand moat, (3) limited quality consumer opportunities in Indian markets leading to quality premium, (4) institutional and retail investors paying up for predictable earnings, (5) lower risk compared to cyclicals. Global FMCG like Procter & Gamble trades at 25–30× by comparison.

EPS Yield = EPS ÷ Share Price × 100. It represents your "earnings return" on investment — what % of your investment the company earns for you (whether paid as dividend or retained). Dividend yield only measures the cash paid out. A stock with EPS yield of 5% and dividend yield of 2% retains 3% for growth. Comparing EPS yield to bond yields is a classic value investing technique — if 10-year government bond yields 7% but EPS yield is only 3%, bonds may offer better risk-adjusted returns.

Absolutely. P/E alone never tells the complete story. Investors paid 50× P/E for TCS in 2004 and were rewarded massively as earnings grew. Investors paid 70× for Infosys in 1999 and suffered in the dot-com bust. The key is whether growth can "grow into" the valuation. A 40× P/E stock that doubles earnings in 3 years will have a 20× P/E in 3 years — very reasonable. Always look at: (1) earnings growth track record, (2) management quality, (3) competitive moat, (4) industry tailwinds, not just the P/E number.

For Indian stocks: NSE India (nseindia.com) → Company → Financials; BSE India (bseindia.com) → Company → Financials; Screener.in (free, excellent); Tickertape.in; Tijori Finance; MoneyControl. For US stocks: Yahoo Finance, Macrotrends, Seeking Alpha, or the company's investor relations page. Use trailing EPS (TTM — Trailing Twelve Months) for trailing P/E, and analyst consensus estimates for forward P/E calculations.

100% free, no signup required. Works for stocks on any market — NSE, BSE, NYSE, NASDAQ, LSE, ASX, SGX. Calculates P/E ratio, EPS yield, fair value price, PEG ratio, and compares against sector benchmarks. All calculations run instantly in your browser.