Valuation
P/E Ratio
Price-to-Earnings Ratio
Market Price per Share ÷ Earnings per Share (EPS)
The P/E ratio tells you how much investors are willing to pay for each rupee of earnings. A stock at ₹100 with EPS of ₹5 has a P/E of 20 — investors pay ₹20 for every ₹1 of earnings.
How to interpret: A high P/E (above 25–30) may indicate the stock is overvalued or that high future growth is expected. A low P/E (below 15) may suggest undervaluation or concerns about the company. Always compare P/E within the same industry.
P/E (TTM)
Price-to-Earnings Ratio (Trailing Twelve Months)
Market Price ÷ Sum of last 4 quarters EPS
TTM P/E uses actual earnings from the most recent 12 months instead of a single quarter. This smooths out seasonal fluctuations and gives a more accurate picture.
How to interpret: TTM P/E is more reliable than quarterly-annualized P/E because it uses real data. If a company had one strong quarter, annualized P/E would look too cheap.
P/Sales
Price-to-Sales Ratio
Market Cap ÷ Total Revenue (TTM)
P/Sales measures how much investors pay per rupee of revenue. Unlike P/E, it works even for unprofitable companies since all companies have revenue.
How to interpret: Useful for high-growth companies with low or no profits. A P/S below 1 is generally considered cheap. Tech companies often trade at P/S of 5–15x. Compare within the same sector.
Market Cap
Market Capitalisation
Current Share Price × Total Outstanding Shares
Market cap is the total market value of a company. It determines whether a stock is large-cap (above ₹20,000 Cr), mid-cap (₹5,000–20,000 Cr), or small-cap (below ₹5,000 Cr).
How to interpret: Large-cap stocks are generally safer and more liquid. Small-caps offer higher growth potential but with greater risk. Market cap changes daily with stock price.
P/B Ratio
Price-to-Book Ratio
Market Price per Share ÷ Book Value per Share
P/B compares market price to accounting book value. A P/B of 3 means investors pay 3× the book value.
How to interpret: IT and pharma have high P/B (5–15×) due to intangible assets. PSU banks often trade at P/B below 1.
Book Value
Book Value Per Share
(Total Assets − Total Liabilities) ÷ Total Outstanding Shares
Book value is the net asset value per share — what each share would be worth if the company liquidated all assets and paid off all debts.
How to interpret: Price-to-Book (P/B) below 1 means the stock trades below asset value.
Earnings & Revenue
EPS
Earnings Per Share
Net Profit ÷ Total Outstanding Shares
EPS tells you how much profit a company earns per share. If a company earns ₹100 Cr profit with 10 Cr shares, EPS is ₹10.
How to interpret: Rising EPS over quarters indicates growing profitability. Compare EPS growth rate (QoQ and YoY) rather than absolute values. Diluted EPS accounts for potential new shares from options/convertibles.
Revenue
Revenue / Total Income
Total sales + Other operating income
Revenue is the total money earned from business operations before any expenses. It is the "top line" of the income statement.
How to interpret: Consistent revenue growth (10–20% YoY) indicates a healthy business. Declining revenue is a red flag unless the company is intentionally shrinking a segment.
PAT
Profit After Tax (Net Profit)
Revenue − All Expenses − Tax
PAT is the bottom line — the actual profit left after deducting all expenses including COGS, salaries, depreciation, interest, and taxes.
How to interpret: PAT growth faster than revenue growth means improving margins. Compare PAT margin (PAT/Revenue) across peers.
Rev/Share
Revenue Per Share
Total Revenue ÷ Total Outstanding Shares
Revenue per share normalizes total revenue by the number of shares, making it easier to compare companies of different sizes.
How to interpret: Rising revenue per share indicates revenue growing faster than share dilution.
Profitability
EBITDA
Earnings Before Interest, Tax, Depreciation & Amortization
Net Profit + Interest + Tax + Depreciation + Amortization
EBITDA measures operating profitability without financing (interest), tax, and accounting (depreciation) effects. It shows how well the core business generates cash.
How to interpret: EBITDA margin above 20% is generally strong. It is the best way to compare operating efficiency across companies with different debt levels.
EBITDA Margin
EBITDA Margin
(EBITDA ÷ Revenue) × 100
EBITDA margin shows what percentage of revenue converts to operating profit. A 25% margin means ₹25 operating profit from every ₹100 of revenue.
How to interpret: Higher is better. IT services: 25–30%. Manufacturing: 12–18%. Retail: 5–10%. Improving margins over time signal operational efficiency.
Net Margin
Net Profit Margin
(Net Profit ÷ Revenue) × 100
Net margin shows the percentage of revenue that becomes actual profit. It accounts for ALL expenses including interest and tax.
How to interpret: Net margin below EBITDA margin is normal (due to interest, tax, depreciation). A widening gap may indicate rising debt costs.
ROE
Return on Equity
(Net Profit ÷ Shareholder Equity) × 100
ROE measures how efficiently a company uses shareholder money. An ROE of 20% means ₹20 profit for every ₹100 of equity.
How to interpret: ROE above 15% is good. Above 20% is excellent. Very high ROE (40%+) could indicate high debt — check debt-to-equity alongside.
ROCE
Return on Capital Employed
EBIT ÷ (Total Assets − Current Liabilities) × 100
ROCE measures how well a company generates profits from ALL capital (both equity and debt), unlike ROE which only considers equity.
How to interpret: ROCE should be higher than the cost of borrowing. Above 15–20% indicates value creation. ROCE consistently above ROE suggests efficient use of debt.
Dividends
Dividend Yield
Dividend Yield
(Annual Dividend per Share ÷ Current Share Price) × 100
Dividend yield is the annual dividend income as a percentage of the current stock price. A stock at ₹100 paying ₹4 dividend has a 4% yield.
How to interpret: Nifty 50 average yield is ~1.2%. Above 3% is high yield in India. Very high yield (8%+) may indicate a falling stock price rather than generous dividends.
DPS
Dividend Per Share
Total Dividends Paid ÷ Total Outstanding Shares
DPS is the actual rupee amount paid as dividend per share. If a company with 10 Cr shares pays ₹50 Cr in dividends, DPS is ₹5.
How to interpret: Consistently rising DPS signals financial strength. A payout ratio above 80% may not be sustainable.
Payout Ratio
Dividend Payout Ratio
(Dividends Paid ÷ Net Profit) × 100
Payout ratio shows what percentage of net profit is distributed as dividends. A 40% payout means 40% goes to dividends and 60% is retained for growth.
How to interpret: Mature companies: 30–60% is normal. High-growth companies: 0–20%. Above 100% means paying more in dividends than earned — not sustainable.
Dividend Growth
Dividend Growth Rate
((Current Year DPS − Previous Year DPS) ÷ Previous Year DPS) × 100
Dividend growth measures how fast a company is increasing dividend payments year over year.
How to interpret: Companies with consistent dividend growth (10%+ annually over 5+ years) are called "dividend aristocrats" and are highly valued by income investors.
Other
Debt/Equity
Debt-to-Equity Ratio
Total Debt ÷ Total Shareholder Equity
D/E shows how much debt a company uses relative to equity. A D/E of 1 means equal debt and equity.
How to interpret: Below 1 is generally healthy. Below 0.5 is conservative. Above 2 is highly leveraged. Banks naturally have high D/E — do not compare with manufacturing.
Face Value
Face Value / Par Value
Set by the company at incorporation (commonly ₹1, ₹2, ₹5, or ₹10)
Face value is the nominal value of a share as stated in the company's charter. It has no relation to market price.
How to interpret: Face value matters for dividends (declared as % of face value), stock splits, and bonus issues.
52-Week High/Low
52-Week High and Low Price
Highest and lowest trading price in the last 252 trading days
Shows the price range a stock has traded in over the past year.
How to interpret: Stocks near 52-week highs may have momentum. Stocks near 52-week lows may be value opportunities or falling for good reasons.