The P/E ratio (Price-to-Earnings ratio) tells you how many rupees investors pay for every ₹1 of annual earnings.
P/E = Share Price ÷ EPS
A P/E of 25 means the stock trades at 25× its annual earnings. High P/E implies heavy future-growth pricing; low P/E implies lower expectations or elevated risk.
Trailing vs forward P/E
Trailing P/E uses the last 12 months of actual earnings. Forward P/E uses projected earnings — more speculative but often more relevant for fast-growing unlisted companies where historical numbers understate current run-rate.
Why it matters for unlisted shares
The unlisted market has no live ticker, so you construct the P/E yourself: take the current unlisted price and divide by the company's latest EPS from its annual report or DRHP. Compare this to listed sector peers — if the unlisted P/E trades at a large premium with no clear justification, the stock may be overpriced.
Example: An unlisted consumer brand at ₹500/share with ₹15 EPS trades at 33× P/E. Listed FMCG peers trade at 45× — the unlisted price looks reasonable on this basis. Related: how to value an unlisted company.