this price-earnings ratio indicates the amount an investor can expect to invest in a company in order to receive one unit of that company’s earnings. This is why the P/E is also sometimes referred to as the ‘multiple’ because it shows how much investors are willing to pay per unit of earnings a year. If a company were currently trading at a multiple (P/E) of 20, the interpretation is that an investor is willing to pay INR 20 to buy a business (or a part of the business) which will fetch him or her with INR 1 of earnings this year and may be more in later years.”
