The The NSE's main stock index, which tracks 50 large, actively traded companies and weights each by the market value of its publicly tradable shares. Read the full meaning of Nifty 50 price to earnings (PE) ratio stood at 19.19 on 29 October 2026, which is about 12% below its five year median of 21.93. For investors trying to understand Nifty earnings growth vs PE re-rating, this gap is the starting point, as the index is being valued at a lower multiple than it has usually carried in recent years.
SEBI is the statutory regulator of India's securities market, with the legal duty to protect investors and to promote and regulate that market. Read the full meaning of SEBI October 2026 bulletin puts the Nifty 50 at 19.4x PE. The same bulletin shows that one year returns are negative, while the 10 year annualised returns are around 10%.
SEBI's October 2026 bulletin shows that the Nifty 50 was down about 8.1% year on year.
Families who invest in index funds are seeing the index level and the earnings numbers move in different directions and it raises the question of whether earnings or the PE decides what the index delivers over a long period.
Five years of earnings that the index did not keep
Over the five years to 29 October 2026, the earnings of the Nifty 50 companies grew at around 11.7% a year, as per IndexPE data. The index price rose only about 5.35% a year over same period, and this price figure excludes A dividend is a part of a company's profit that the board decides to pay to shareholders, usually in cash, in proportion to the shares held. Read the full meaning of Dividend.
India Macro Indicators data shows that the 10 year median PE of the Nifty 50 was 23.2 on the same date. Craytheon data shows that the present PE is 16.9% below its 10 year average. Individuals who invested in the index when valuations were higher are seeing a lower return than the earnings record of the companies would suggest.
The Nifty Next 50 shows a similar pattern. Its PE was 17.07 on 23 October, which is about 24% below its own five year median.
Over five years, the earnings of the Next 50 companies grew about 18.96% a year, while the index price rose 9.19% a year. The gap between earnings and price is therefore wider here than in the Nifty 50.
Alongside this, investors are continuing their monthly SIPs in spite of the weak markets. The SEBI October bulletin summary shows that monthly SIP inflows held at Rs 324.9 billion.
What Q2 and FY27 estimates say
Brokerages expected a strong set of results for the July to September quarter of FY27, and the results season is now under way. Before the results season, Motilal Oswal had estimated that Nifty 50 earnings would rise 27% year on year in Q2, which would be the best growth in 17 quarters.
Other brokerages are in a similar range.
In January, Elara had said that the gains in the Nifty would be driven by earnings rather than by valuation expansion.
The forward PE uses the expected earnings of the next twelve months, so it will be lower than the trailing PE when earnings are rising.
With the Q2 estimates already placed high, Elara's cut to its FY27 estimate is the figure to watch as the results come in.
