Nifty 50 P/E at 20.21: price down, earnings up in May

Where the index stands

The Nifty 50 closed at 23,416.55 on Thursday, 4 June 2026, at a price-to-earnings ratio of 20.21. Its price-to-book ratio was 3.11 and its dividend yield 1.19%.

The index is 11.1% below its record close of 26,328.55 from 2 January. The full series is on our Nifty P/E ratio page.

What changed since early May

In the May post the index was at 24,330.95 and the P/E at 21.21. Since then:

• The index fell 3.8%.
• The P/E fell 4.7%.
• Dividing one by the other, the earnings behind the index rose about 1.0%.

That is the largest monthly rise in implied earnings in this series so far, and the first month in which the ratio fell further than the price. Through March and April the ratio moved almost one for one with the index.

May itself was a modest month for the index. It closed April at 23,997.55 and May at 23,547.75, down 1.9%, while the P/E went from 20.94 to 20.27.

The series so far

Across the three months since 5 March, the index is down 5.5% and the P/E down 6.7%. The implied earnings are up about 1.4%, and most of that came in the last month.

Where 20.21 sits

Since 31 March 2021, when NSE moved to consolidated earnings, there have been 1,276 sessions. The March post explains why the comparison starts there.

• P/E: 79 sessions closed lower than 20.21, about 6%. The median is 22.27.
• P/B: only 5 sessions closed below 3.11. The low is still 3.05, from 30 March.
• Dividend yield: 1.19%, below its 1.28% median; 999 sessions offered more.

The P/E is back near the cheap edge of its five-year range, where it was in early April, with the index about 2% higher than then.

The dividend yield moved on its own

The yield is the one measure pointing the other way, and the reason is in the numbers. On 27 May it was 1.38%. By 4 June it was 1.19%, while the index fell 2.1%. A falling price should lift a yield. For it to drop this much, the trailing dividends NSE divides by must have fallen, by about 15% on this arithmetic.

That kind of step shows up in the series from time to time. It is worth knowing before reading a yield change as a change in value.

A year on

On 4 June 2025 the index closed at 24,620.20 at a P/E of 22.14. A year later the price is 4.9% lower and the P/E 8.7% lower, which implies earnings up about 4.2%.

For a contrast, the Nifty Next 50 closed on 4 June at a P/E of 18.97, still below the Nifty 50's.

What this does not tell you

Cheap against five years is not a floor. The ratio has been near 20 several times since March. That says nothing about whether it goes lower.

The earnings figure is trailing and it moves. A step in the "E" can change the ratio on a day the price does nothing, in either direction.

It is the index, not your fund. Large-cap funds hold their own selection, at their own weights.

Where to go from here

For the month across markets, see the May 2026 market recap and FII and DII flows in May. The guide on whether the market is expensive covers what a ratio like this can and cannot say.