Video narration
Two stocks can look very different: one costs ₹100 and another costs ₹1000. But share price alone doesn’t tell you which one is “expensive.” That’s where the PE Ratio comes in. PE stands for Price to Earnings Ratio. It compares the share price to the company’s earnings per share. Formula: PE = Share Price ÷ Earnings per Share. Example: if a company’s share price is ₹200 and it earns ₹10 profit per share, PE = 200 ÷ 10 = 20. That means you’re paying ₹20 for every ₹1 of profit. A higher PE often means investors expect stronger future growth. A lower PE can mean the stock might be cheaper—or it could signal problems. So don’t use PE alone. Before investing, also check growth, profits, and debt.