Half the Sensex shares trading at PE of 10 or less

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Mumbai, Oct 12 : With the stock market taking a severe beating, the PE or Price Earning ratio of 15 out of 30 Sensex shares has dropped to ten or less as of Friday—October 10, according to the data available. 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 drop 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.

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) .