CAPE Ratio of India’s NIFTY 50 Index 1999 – 2019

The current CAPE (Shiller PE) ratio of India’s NIFTY 50 stock index is 25.81 (6/30/2018). The 16-year historical average ratio is 21.88. A ratio higher than the historical average might indicate that India’s stock market is currently overvalued. The price-earnings ratio (TTM) is 25.90.

[Nifty 50] – P/E (TTM) & CAPE Ratio

To examine the global CAPE ratios for the past 20+ years, purchase the Global Valuations Database by Siblis Research that provides Shiller PE ratios of 22 nations, including Dividend Yields and Total Market Cap to GNI ratios of 28 countries. Check a sample dataset from here.

India CAPE ratio Nifty 50 Shiller PE
There exists a negative correlation between the historical CAPE ratio of the index and forward returns. This would suggests that Shiller PE could be used to evaluate the valuation level of India’s stock market. Note that the axis of the forward return is reversed.

NIFTY 50 stock index

NIFTY 50 consists of fifty major companies. listed on the National Stock Exchange of India It is considered as a benchmark index for India’s equity market. The index is free float market cap weighted, just like the S&P 500. The largest sector of NIFTY 50 is Financial Services, followed by Information Technology. The three largest components are HDFC Bank, Housing Development Finance Corp and ITC. The index was launched in April 1996.

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