Nifty Healthcare P/E at 41.3: 2.1 times the Nifty 50

The reading

The Nifty Healthcare Index closed at 15,855.55 on Friday, 9 October 2026, at a price-to-earnings ratio of 41.28. Its price-to-book ratio was 5.24, and its dividend yield as of 8 October was 0.49%.

These are NSE's published end-of-day ratios, and the daily series is on the Nifty Healthcare valuation page. The P/E divides the index by the last twelve months of its members' profits; the P/B divides it by their book value.

Not the same index as Nifty Pharma

Both indices hold 20 stocks, and 16 of them are common to both. The difference is hospitals. The two index funds' portfolios on 30 September 2026, the DSP Nifty Healthcare Index Fund and the ICICI Prudential Nifty Pharma Index Fund, show it:

The hospital stocks are the dear part. On BSE's figures for 9 October, Apollo Hospitals trades at a P/E of 53.1, Max Healthcare at 59.0 and Fortis at 55.4. Sun Pharma, the largest member of both indices, is at 34.8, and Cipla and Dr Reddy's at about 31. That mix is why Healthcare has usually cost more than Pharma.

Against its own record

NSE's healthcare P/E series in our data runs from November 2020, with one stray reading from July 2016. That is 1,452 sessions:

1,235 of the 1,452 sessions closed at a lower P/E, which puts today at the 85th percentile. Over the last five years alone, 1,019 of 1,235 sessions were lower, the 83rd percentile. The record high is barely two months old, and the record low and high both fall inside the five-year window.

The P/B says something different. At 5.24 it is below its median of 5.45, and only 519 sessions were lower: the 36th percentile. Its range runs from 4.29 (14 March 2023) to 6.71 (30 August 2024). Dear on earnings and middling on book means thinner profits per rupee of book. P/B divided by P/E, a rough return on equity, is 12.7% today against 14.2% a year ago.

Price up, earnings flat

The last column is the index divided by its P/E, a rough stand-in for earnings per index unit. The index rose 8.6% and the P/E 7.6%, so the earnings figure grew about 1.0%. Nearly all of the year's gain was a higher multiple.

Nifty Pharma re-rated harder. Its index rose 18.4% and its P/E 18.8%, with earnings slightly lower (-0.4%). That closed most of the gap between the two. Healthcare's P/E divided by Pharma's has a median of 1.10 since November 2020, in a range from 0.99 (3 June 2022) to 1.20 (13 August 2025). It is 1.03 today, so the premium the hospitals add is near the smallest it has been.

Against the Nifty 50

Healthcare costs 2.14 times the Nifty 50 on earnings, 41.28 against 19.27. The median multiple over 1,452 shared sessions is 1.69, and 1,416 sessions had a lower one than today. The record, 2.26, came on 29 September 2026. A year ago it was 1.72.

Both sides moved. Healthcare's P/E rose 7.6% while the Nifty 50's P/E fell 13.5%, from 22.27 to 19.27. The Nifty 50's own earnings figure rose 3.4% over the year, more than healthcare's 1.0%, so the wider premium came from price, not profit.

Healthcare's record close, 16,941.50, came on 31 August, and the index is 6.4% below it. Over five years from 8 October 2021 it is up 76.8%, close to Pharma's 78.9% and well ahead of the Nifty 50's 25.8%. The dividend yield as of 8 October, 0.49%, is below its median of 0.59%, which on a yield reading is the dear side.

Where the funds sit

The index is tracked by passive funds such as the DSP index fund and the Axis NIFTY Healthcare ETF. Active pharma and healthcare funds sit in the sectoral and thematic category and hold their own mix, often with more mid and small companies; SBI Healthcare Opportunities is one of them. The indices that reach further down are dearer still: Nifty MidSmall Healthcare closed at a P/E of 44.23 and Nifty500 Healthcare at 44.28. Our October pharma and healthcare fund returns shows how the funds have done.

What this does not tell you

A high P/E is not a forecast. Our look at whether Nifty P/E predicts returns shows how loose the link is even for the broad index, and this record is under six years long.

The ratios move in steps. Earnings arrive quarterly and members change twice a year. The published figures cannot separate company results from changes in who is in the index.

One stock carries a lot. Sun Pharma is about a sixth of the index, so its results alone can shift the P/E.

None of this is a recommendation to buy or sell anything.

Where to go from here

The guide to reading an index P/E explains what the ratio can and cannot say, and the guide to sectoral and thematic funds covers the concentration risk in a one-sector bet. For the drug makers alone, see Nifty Pharma at a P/E of 40.4.