HI,i have seen the threads regarding the PE multiple but my confusion lies in the fact that we know that there are 3 PE multiples (backward,current,forward) PE based on the EPS,

My question is which PE multiples are shown on the NSE website ? are they current or forward?

if forward then do they determine the growth rate of eps they are considering?

can i get the PE of sensex, nifty please.

The exchanges never use earnings estimates.

All PE data available on the exchanges is based on historical earnings.

The PE ratio for NSE Nifty is available here:

http://nseindia.com/content/indices/ind_pepbyield.htm

Right now, I am not able to access BSE's site, but I am sure BSE also publishes PE data for the Sensex. Once, I am able to access BSE's site, I will provide you the exact link.

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Here is the data for BSE Sensex:

http://www.bseindia.com/about/st_key/index_ratios.asp

(The page is best viewed using Internet Explorer).

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Yesterday, I wrote to NSE and asked them what earnings are used to calculate Nifty's PE ratio.

I got a reply within 24 hours....

I will directly paste the reply.

I guess BSE does the same.

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You can send your queries and feedback to NSE via this form:

http://nseindia.com/content/us/feedback_frm.htm

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hey Sachin thanks for ur efforts ,appreciate it!!!
mmm sensex traded at PE of 21.66
which means the investors and traders are willing to pay 21 times the earnings, doesn't that suggest the markets are overvalued ,
what should be the ideal PE such that the prices are close to their valuations.i mean historically did we have a PE which matched the prices to its earnings fairly.

there is never a right PE for any security or index.

for every investor, the right PE is a different number.

An Indian investor gets 8% from a fixed deposit.

To such an investor, a PE of 20 (for a zero-growth stable company) may appear a bit stretched.

An American investor gets 1% from a fixed deposit.

To this investor, a PE of 20 (for the same zero-growth stable company) may appear attractive.

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The PE that you are looking at is historical PE.

Markets discount the future.

FY 2010 will be over on March 31st, and FY 2011 will start from April 1st 2010.

Investors are already discounting FY 2011 earnings estimates.

The eps expectations are around Rs 1150.

At 16900, the forward PE for Sensex is 14.7.

This is nowhere near the PE in January 2008, when Sensex had touched 21000.

At that time, analysts were expecting an eps of 1025 for FY 2009.

This meant at the peak of 21200, markets were trading at 20.7 times forward earnings.

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When a stock or market is trading at a high PE, there is little room for disappointment.

Had the earnings growth momentum continued in FY 2009 and FY 2010, Sensex wouldn't have corrected much.

However, as the PE's were already high and earnings started to go down, the markets corrected sharply.

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Alchemist, please look at this. Does the graphic (1936-2009 - P/E Ratios for the S&P 500) look right to you?

What do you feel is "not right" about it?

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The upward spike on the right-hand side.

An sharp fall in earnings can make PE multiples look abnormally high.

Suppose, a company has a market value of 100 crore and PAT of 10 crore.

If the profit falls to 1 crore, the PE would jump from 10 to 100.

I guess for many companies in the S&P 500, profits have fallen sharply and that is the reason why the PE ratio has risen so sharply.

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So then that explains the cautionary tenor of the article: profits collapse but share price doesn't.

share prices have come down from the top.

this high PE ratio won't last forever.

the PE contraction can happen in 3 ways:

the index goes down, but earnings fall to a lesser extent.
the index goes down and the earnings go up.
the index goes up, but earnings increase at a faster pace.

if the fall in earnings in 2008-2009 was abnormal, the bounceback in earnings would be abnormal too.

when there has been an abnormal change in earnings of a stock/index, one should look at the long-term trend in earnings and then value that stock/index.

if we try to value a stock/index by just by looking at the earnings in one single abnormal period, there is a good chance that our valuation would be wrong.

I am not saying the S&P 500 is undervalued or overvalued.

What I mean is we should consider the long-term earnings potential of the index before we decide what PE we want to give it.

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Where i can find latest PE and PEG ratio ? Dont know latest PE is given here or not ?

www.adityabirlamoney.com

Use moneycontrol.com.

See the bottom of the home page, for links to alphabetical list of stocks.

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I don't know any site that gives PEG ratio's for stocks.

PEG isn't of much important.

Use PEG only for companies that are likely to grow at a rapid pace in next 3-5 years.

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The PE mentioned at moneycontrol.com is the standalone figure.

The consolidated figure may be different.

Visit NSE's site to check if the consolidated earnings are substantially different from the standalone earnings.

If there isn't much of a difference (less than 15%), one can ignore the consolidated earnings.

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