So far in the year, the sensex has gained over 19%, the mid-cap index is up 24%, while the small-cap index has jumped 31%. A high P/E indicates investors are willing to pay a higher price for each rupee earned. "In a way, we can also say that the PE ratio is actually the 'price-to-hope' ratio. "I'm expecting some correction at current levels, but I'm not sure if the same would be a price correction or a time correction," Agrawal said. In case of a price correction, the stock price falls which brings down the PE ratio.

Source: Times of India July 11, 2017 22:30 UTC