Nifty 50 P/E slips under 20, first time since March 2025

Monday's close

On Monday, 23 March 2026, the Nifty 50 closed at 22,512.65 at a price-to-earnings ratio of 19.70. Its price-to-book ratio was 3.06 and its dividend yield 1.39%.

It did not stay there. The index rose the next two days, and the P/E closed at 20.05 on Tuesday and 20.39 on Wednesday, with the index at 23,306.45.

When we last looked, on 5 March, the ratio was 21.67. Between that close and Monday's, the index fell 9.1%.

How rare is a P/E under 20?

On NSE's current method, which uses consolidated earnings from 31 March 2021, it is uncommon. Of the 1,231 sessions since then, 40 closed below 20, about 3%. They fall into four episodes:

The previous close under 20 was on 13 March 2025, when the ratio was 19.91. So Monday's reading is the first in a little over a year, not the first in a generation.

It is also not the lowest. Twenty-two sessions since 2021 closed below 19.70: nineteen in 2022 and three between 28 February and 4 March 2025.

Price, not profits

From the record close of 26,328.55 on 2 January 2026 to Monday:

• The index fell 14.5%.
• The P/E fell 14.0%, from 22.92 to 19.70.
• Dividing one by the other, the earnings behind the index were about 0.5% lower.

Earnings were close to flat, so almost all of the P/E's fall since January is price. The same holds over this month: from 5 March to 23 March the index and the P/E both fell by 9.1%.

The comparison with last year's low is telling. On 4 March 2025 the ratio closed at 19.63, with the index at 22,082.65. On Monday the index was 1.9% higher and the P/E 0.4% higher, which implies earnings up about 1.6% in a little over a year. The market is back where it was, and so, nearly, are the profits behind it.

The P/B tells a stronger story

The price-to-book ratio went further than the P/E. At 3.06 on Monday it was the lowest since NSE's switch in 2021, and well under the 3.29 of the March 2025 low.

The switch did not disturb the P/B, which went from 4.21 to 4.20 on the day, so its longer record can be used too. The last time the Nifty 50 closed at a P/B of 3.06 or less was 24 September 2020.

The reason is the same arithmetic as before. Between 4 March 2025 and Monday, the book value behind the index grew about 9.6% while earnings grew about 1.6%. Book has kept growing; prices and profits have not.

The long record, kept apart

Since 1999, 2,543 of 6,748 sessions closed below 19.70, about 38%. On that record Monday's number looks ordinary. But until 30 March 2021 NSE divided by standalone earnings, and the switch moved the ratio from 40.43 to 33.20 in a day. The two methods are different scales, so we keep the comparison to the five years that share a method.

What this does not tell you

Twenty is a round number, not a line with meaning. Nothing changes at 19.99 that did not hold at 20.01.

Past episodes are not a pattern. The 2022 stretch under 20 lasted about two months, the 2025 one about two weeks. Three episodes are too few to predict how long, or how low, this one runs.

The earnings are trailing. The "E" is the last twelve months of reported profit. If the next results are weaker, the ratio was lower than it looked.

Where to go from here

The Nifty P/E ratio page has the daily history. For the rest of this week's picture, see the India VIX spike in March 2026 and foreign selling topping 1 lakh crore.

The guides on how to read an index P/E ratio and on the psychology of a market crash are worth reading alongside these numbers.