PE ratio is simply the share price divided by earnings per share. A PE of 20 means, loosely, you're paying ₹20 for every ₹1 of the company's current annual profit. A high PE isn't automatically 'expensive' and a low PE isn't automatically 'cheap' — it depends entirely on how fast that profit is expected to grow, and how reliable that growth is. A fast-growing, dominant business can genuinely deserve a higher PE than a slow, stagnant one. The real skill is judging whether the PE the market is currently paying actually matches the growth and quality on offer — which is exactly what our Valuation and Reverse DCF scores are trying to do.