What is the P/E ratio, simply?
P/E ratio is one of the first bits of jargon you'll meet. The idea is simpler than the name.
Price compared to earnings
P/E stands for Price-to-Earnings. It tells you how many rupees you're paying for each rupee of yearly profit the company makes. A P/E of 20 roughly means you're paying ₹20 for every ₹1 the company earns in a year.
High or low — what it hints
A high P/E often means people expect strong future growth (or that the share is pricey). A low P/E can mean a bargain — or that people are worried. It's a clue, never a verdict on its own.
Compare like with like
A P/E only means something next to context: the company's own history and its industry's typical level. Comparing a fast-growing tech firm's P/E to a steady bank's tells you little. Zenoor always shows the comparison, not just the number.
Ready to start investing?
You'll need a demat account to buy any share in India.