The price-to-earnings ratio divides a company's share price by its earnings per share, or equivalently its market value by its net profit. A P/E of 40 means investors are paying 40 rupees for each rupee of annual profit. It is the quickest way to compare how the market prices different companies.
A P/E depends on which earnings are used: last year's, the last twelve months, or a forecast. It ignores debt, profit can be distorted by one-off items, and it means little for companies that lose money. A high P/E can reflect strong expected growth or just an expensive stock.
INDmoney compared Jio Platforms with Bharti Airtel. At the IPO price Jio traded at 34.33 times earnings against 40.71 for Airtel, a discount of about 15.7%. After listing at ₹1,358 its P/E rose to 41.66, slightly above Airtel's. The business and its earnings had not changed, only the price had.
State which earnings a P/E uses, compare it with the company's own history and with peers of similar growth and debt, and use it alongside other measures.