Nifty Pharma P/E at 40.4: near its highest since 2021

Where pharma stands

Nifty Pharma closed at 26,117.10 on Monday, 5 October 2026, at a price-to-earnings ratio of 40.40. Its price-to-book ratio was 4.92 and its dividend yield 0.54%.

These are NSE's published end-of-day ratios. The daily history is on the Nifty Pharma valuation page. Our April post found the P/E at 34.69, just above its middle. It has since moved a long way.

Near the top of its range

The comparisons start on 31 March 2021, when NSE moved its index P/Es to consolidated earnings. That leaves 1,362 sessions to 5 October.

Only 52 of 1,362 sessions, today included, had a P/E this high, so today sits at about the 96th percentile. The record P/E came as recently as 3 August this year. The index's record close, 27,186.45, came on 31 August, and it is now 3.9% below that.

Price up, earnings flat

Pharma's P/E on or just before 1 October each year:

The last column is the index divided by its P/E, a rough stand-in for earnings per index unit. It rose 8% from 2024 to 2025 and has not moved since. So the 20.2% rise in the index over the past year is almost entirely a higher multiple, not higher profit.

Over two years the picture is kinder: the index is up 12.1% and the earnings measure about 7.7%.

It held up while the market fell

Since the end of 2025 Nifty Pharma is up 14.9% and the Nifty 50 is down 13.7%. Over five years, from 1 October 2021, Pharma is up 79% (about 12.3% a year) and the Nifty 50 up 28.7% (about 5.2% a year).

Against the Nifty 50

Pharma has always cost more than the market on earnings. Today it costs 2.09 times as much (40.40 against 19.30). Part of that is pharma getting dearer and part is the Nifty 50 getting cheaper: its P/E is 19.30, and only 8 sessions since 2021 have had a lower one.

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.

The ratios update in steps. Earnings figures arrive quarterly, so a P/E can move on a day with no change in price. The published numbers cannot separate company results from changes in the index's members.

The P/E looks backwards. It divides by the last twelve months of profit.

These are indices, not funds. Pharma and healthcare funds hold their own mix. Our October pharma and healthcare fund returns shows how they have done.

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 single-sector bet. Nifty Pharma's valuation page has the full daily series, and the screener ranks pharma funds from their daily NAVs.