P/E ratio and fair value shows contrasting suggestions. how is this possible?

Discussion in 'Ask any question!' started by Arun, Feb 22, 2021 at 9:34 AM.

  1. Arun

    Arun New Member

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    Today I noticed that Tata power has high P/E ratio than industry value but it has 60 percent less price than fair value. how is this possible? As per P/E ratio share price is already over valued but as per fair price it is under valued. Why there is contrast here? And what does this mean?
     
  2. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Are you talking about Tata Motors?
    I can't say what it is specifically, but maybe it is because Tata Motors is in a different market, the Indian one, that maybe the industry average doesn't hold so much.
     

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