Buy 5 large CAP share by looking at Peg Ratio. At least 42 percent will be earned.

Most of the stocks have lost their one year earnings in the last two months. But some stocks still remain strong – they Large-cap Are, in the right sector, and their management team has a good track record. In such a situation, will it not be right to see them at this time? Especially when they Most important ratio Are you good in terms of?

And no, we PE (Price-to-Erning) Rati Not talking about In fact, it is not right to decide to invest only by looking at the PE ratio, nor should it be the basis at the index level.

Why not PE ratio?

In the end of the year 2020 Nifty PE Resho 37 Was while today Close to 20 Is. The question is – were stocks expensive in 2020? And are they cheap today?

Actually, The PE ratio alone cannot decide whether a stock is cheaper or expensive. Instead we should see a more precise ratio –Peg ratio.

Why is PEG ratio better?

Peg ratio Connects PE to the company's growth rate.

📌 PEG Ratio = Pe Ratio / Earnings Growth Rate

With the help of PEG, we can understand that a stock is just looking cheap or really a value-bye.

Example:

1️⃣ Company x PE ratio of 20 Is, and its earnings growth rate 10% Is.
👉 PEG Ratio = 20 / 10 = 2

2️⃣ Company Y PE ratio of 30 Is, but its growth rate 25% Is.
👉 PEG Ratio = 30 / 25 = 1.2

i.e, Even though the company is more of Y, but its PEG is less. This can mean this can be better in terms of stock investment.

4 important things to understand PEG ratio:

1️⃣ Growth rate to be reliable: If the company's growth has been underestimated, the Peg ratio can also mislead.
2️⃣ Compare sector-wise: PEG of each sector is different. Tech companies may have more PEG, while utility companies less.
3️⃣ Effect of Economic Conditions: In low interest rate environment The elevated PEG ratio can also be correct.
4️⃣ See also other financial things with PEG: Do not rely on PEG, the company Loans, liquidity, industry trends See also.

Peg ratio If less than 1 is a good sign, but sometimes Peg from 1.2 to 1.3 Can also be considered correct if the company is strong.

Take a look at these 5 stocks (according to the figures of March 16, 2025):

In Shreeram Finance and Welspun Corp The PEG ratio of is the best, which shows that they can be strong growth and valuby.

Why is it dangerous to make PE ratio the basis?

✔ just Selling stock by looking at pe Can prove wrong, because we You can make the mistake of selling wealth creators early and buying at expensive prices later.
✔ In some sectors The high pe of the same company can spoil the entire industry's pe, Due to which many good stocks can look cheap, while in reality they are not there.