Nifty Auto P/E at 29.5: mid-range, but P/B near a low

The number

Nifty Auto closed at 25,384.95 on 1 October 2026, at a price-to-earnings ratio of 29.50. Its price-to-book ratio was 3.97 and its dividend yield 1.15%.

These are NSE's published end-of-day figures; the daily series is on the Nifty Auto valuation page. In May the P/E was 29.35. The multiple is almost where it was; the price and the earnings behind it are not.

Two yardsticks, two answers

The P/E history needs a caution. Until the end of 2021 the Nifty Auto P/E was inflated by depressed earnings: it read 747.43 on 29 April 2021 and was still 94.55 on 3 February 2022. So the P/E comparison below starts on 1 January 2022 (1,171 sessions); the P/B and dividend-yield comparisons start on 31 March 2021 (1,359 sessions).

• P/E: 607 of 1,171 sessions closed lower, about the 52nd percentile. The lowest reading, 19.38, was on 7 April 2025.
• P/B: only one session in 1,359 closed lower than 3.97. The median is 4.83.
• Dividend yield: 175 sessions paid a higher yield than 1.15%, so it is a little above the middle.

On earnings the index is priced about as usual. On book value it is as cheap as it has been since 2021.

Earnings fell while the price held up

On 1 October 2025 Nifty Auto closed at 26,768.65 at a P/E of 27.75.

• The index is down 5.2% over the year.
• The P/E is up 6.3%.
• Dividing price by P/E, the earnings behind the index are down about 10.8%.

That is the reverse of what our IT and FMCG posts found, where profits rose while prices fell. Here the P/E is higher than a year ago because earnings fell by more than the price. Since 12 May, the date of our May post, the index is 2.9% lower and the implied earnings 3.4% lower.

The run to August, and back

The index reached a record close of 29,647.90 on 7 August 2026. It is now 14.4% below that, and 9.9% lower since the end of 2025. The P/B fell from 4.59 on 7 August to 3.97, a drop of 13.5%, which is close to the fall in the price itself: book value per unit of the index has barely moved.

Against the Nifty 50

Nifty Auto's P/E was 1.54 times the Nifty 50's 19.19 on 1 October. Since 2022 that multiple has had a median of 1.32. So next to the broad market the auto index costs more than usual on earnings, even though its own multiple is mid-range. The Nifty 50's P/E has fallen to 19.19 from 21.96 a year ago.

What this does not tell you

Cheap on book is not cheap on earnings. The two ratios disagree here, and neither is "right". P/B says the price is low against the assets on the balance sheet; P/E says the earnings that justify it have been shrinking.

It is not a buy signal. Both readings compare the index with its own short past.

The earnings figure is derived. It divides the close by NSE's P/E, and moves when the basket changes at the twice-yearly rebalancing as well as when companies earn more or less.

It is not a fund. A fund holds its own selection of companies at its own weights.

Where to go from here

The Nifty Auto valuation page has the daily history. For the wider sector picture, read our third-quarter sector index review, and for the arithmetic see how to read an index P/E ratio.