Hello, I just opened my account with Zerodha. After adding some company stocks in Watchlist section, I noticed stocks P.E ratio is different. For example, I notices, P.E ratio of 8K miles stock is showing around 20.38, but in moneycontrol same stocks P.E is showing 13.45. Why is that ?
Price changes every trading day, PE Ratio changes.
So, zerodha kite is showing latest P.E and moneycontrol is showing last 12 month avg P.E ?
No avg PE. EPS update period could have been for different between Z & Moneycontrol. Check out the EPS under financials and calculate PE. Then you can find where the difference is.
You can use StockAxis to get latest PE with a lot more information.
I Checked StockAxis. They shown historical P.E ratio of each days. It’s not matching with P.E ratio shown in Kite.
you are using the PE the wrong way.
PE is used only as a comparison metric. By itself it is of no use.
How can I compare if I can not validate the data shown in Kite with other websites ? Small fluctuations are okay, but I am talking about gap of 10 or more. For example, Kite is showing Vikash Ecotech’s P.E as 35. But in StockAxis and other sites, it’s showing around 20.
Every website is considering different prices for PE calculations. I have no idea what prices they are using. Sometime they may not updated the earnings.
what you do is , pull the latest quarterly earnings and use yesterdays close for stock x and do the same for stock Y and do the comparison.
Always best to pull data from latest reports.
What’s more important is forward PE and predicting it. Past PE is of no use going forward. So don’t waste time in what has already happened. Professional traders always look to forecast the earnings. Past earnings are already factoring into the price.
My suggestion is learn to do valuations. Its not easy , but its something you have to as investor.
But most likely this is because, one is looking at the standalone PE on MoneyControl, whereas we show the consolidated PE, which is also what one should be looking at, ideally.
I have also raised a similar query before. From what I understand, I think Kite (which is showing the fundamental data using smallcase) is showing the PE based on last FY earnings and not based on the latest 4 quarterly earnings (TTM) whereas most other sites show PE from TTM data as it makes much more sense.
Eg. 8K Miles EPS for last FY is 34.13 and TTM EPS is 51.9 hence corresponding PE as per LTP 706 is 20.6 and 13.6 respectively.
Of course EPS will vary slightly as different sites include/exclude certain components but variation won’t be as high as that of an entire year of earnings if you check PE in March/April!
I think @Matti should highlight this to smallcase team as it will help many investors on the Kite platform as well as their screener to make better informed decisions.
Another simple way is simply look up the quote on NSE website. It will give you the stock PE.
Thank you for the clarification. So, which one should I consider? P.E from FY EPS or TTM EPS? I think TTM EPS is the latest, right ?
moneycontrol also shows consolidate P.E last time I checked.
Yes TTM, and most sites update data based on that every quarter as results are out. The FY EPS can be used if you want to compare YoY performance but it is not helpful when you want to get the latest PE ratio. Don’t know why smallcase went for yearly data. May be tagging @vasanthkamath can help.
Also as @trader_dude mentioned forward PE is much more important but knowing current PE is at least better than working with last FY PE. I guess the pro version of smallcase screener also provides you with forward PE.
We currently show two types of PE - historical and forward. Forward is the best thing to use, while comparing valuations. For historical PE, we preferred the yearly number because of the inconsistent approach followed by Indian companies while reporting quarterly numbers. Most Indian companies report quarterly numbers on standalone basis, while some report on consolidated basis. It is always good to use consolidated numbers, to get a holistic view about the company. Thus to ensure better comparison and consistency, we decided to go with the yearly consolidated numbers.
Thanks for the reply Vasanth. But I feel that since this data is used in screener primarily to filter out stocks, TTM data would be really helpful. Currently if you check any fast moving stocks like Venky’s (PE 33 vs 51 in Kite), after a year of earnings growth, the PE or other data based on last year’s earnings would be of no use.
Would be great if you can provide latest data from some other trusted source may be?