← GlossaryInvesting
P/E Ratio
The price-to-earnings ratio divides a company’s share price by its earnings per share. A P/E of 30 means investors are paying ₹30 for every ₹1 of annual profit, usually because they expect profits to grow.
Why It Matters
A high P/E is not good or bad by itself; it is a measure of how much optimism is already in the price.
In India
LG Electronics India’s 2025 IPO was priced at a lower P/E than listed rivals, one reason it was so heavily oversubscribed.
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