Nifty Auto P/E at 29.4: dear on earnings, cheap on book

Two ratios, two answers

Nifty Auto closed at 26,142.60 on Tuesday, 12 May 2026, at a price-to-earnings ratio of 29.35 and a price-to-book ratio of 4.48. Its dividend yield was 1.22%.

Read against its own history, the first of those numbers looks expensive and the second cheap. Both come from NSE's end-of-day figures, charted on the Nifty Auto valuation page.

Why this post starts in 2023

Most of these comparisons start on 31 March 2021, when NSE moved index P/Es to consolidated earnings. For Auto that does not work. The switch took its P/E from 195.43 to 713.22 in a day, and through 2021 and 2022 the ratio ran from 37 to 747 because the earnings under it were so small. A median that includes those years says nothing useful.

So this post uses the period since 1 January 2023, when the P/E settled into a normal range: 824 sessions.

• P/E: 600 sessions closed lower, about the 73rd percentile. The low, 19.38, came on 7 April 2025.
• P/B: only 72 sessions closed lower, about the 9th percentile. The low, 4.07, was on 30 March 2026.
• Dividend yield: only 26 sessions yielded more than 1.22%.

Profits fell, book grew

A year earlier, on 12 May 2025, the index closed at 23,400.45, at a P/E of 22.66 and a P/B of 4.95.

• The index is up 11.7%.
• The earnings behind it, price divided by P/E, are down about 13.8%.
• The book value behind it, price divided by P/B, is up about 23.4%.

The earnings did not slide gradually. They fell in steps, each on a single day with little change in price:

The last row is the first step up in a year.

Dividing the P/B by the P/E gives the year's earnings as a share of book. For Nifty Auto it fell from about 21.8% a year ago to 15.3% now. That is why the two ratios disagree: the book is bigger, and it is earning less.

The price path

Nifty Auto set its record close of 28,922.35 on 6 January 2026. It fell 17.8% to 23,769.60 by 30 March, and has since recovered 10.0%. It is 9.6% below the record.

Over the same stretch from 30 March, the Nifty 50 rose 4.7%. Against the market, Auto's P/E is 1.45 times the Nifty 50's 20.30. Since January 2023 that multiple has had a median of 1.14, and 689 of 824 sessions showed a smaller one.

EV and New Age Automotive alongside

NSE also prices a narrower index of electric-vehicle and new-age automotive companies. Its daily history here runs from 30 May 2024, so it has only 481 sessions behind it.

The EV index is near the top of its short range. Its P/E peaked at 43.18 on 6 May 2026. Over the year its price rose 4.7% while the earnings behind it fell about 25.5%. It is 15.4% below its peak close of 3,530.94 on 27 September 2024.

Two years of history is too short to call any level normal. The table shows where it sits, not where it belongs.

What this does not tell you

A falling-earnings P/E can fall fast the other way. If the step up in May is followed by more, the ratio drops without the price moving.

A low P/B is not a bargain by itself. Here it mostly reflects a lower return on a larger book.

Index members change. Some of the steps in earnings and book may be changes in the index's companies rather than in their results; the published ratios cannot separate the two.

These are indices, not funds. Auto and mobility funds hold their own mix, often with component makers and dealers.

Where to go from here

The EV & New Age Automotive page has that index's daily series. For the market as a whole, see the Nifty 50 P/E post for May. The guide on how to read an index P/E ratio covers why a P/E rises when earnings fall, and sectoral and thematic funds covers the risks of a one-sector fund.