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The PE ratio for as many as 11 Sensex shares is in single digits, the data reveals. The PE ratio indicates to what extent market is willing to pay for the company’s earnings. PE is typically higher when the market is booming and drops when the sentiment turns bearish. High performing companies generally tend to command higher PE ratios. PE ratio also depends upon liquidity available in the market.The NDTv writes-

Among the companies whose PE ratios are less than 10 are ICICI Bank (9.9), SBI (9.8), Reliance Comm (8.6), Satyam Computers (9.1), ACC (7.4), Tata Motors (6), DLF (5.9), Hindalco (4.8), Grasim (4.7), Sterlite (4.4). The lowest PE is that of Tata Steel at only (1.7) .

The PE for the Sensex overall was 13.44 as of October 10 largely due to comparatively higher valuations still commanded by shares like HDFC Bank (25.7), the highest among the 30 Sensex shares. Besides, Hindustan Unilever also has high PE of 24.8 and so also BHEL 22.3 and NTPC at 20.2. READ MORE…