Triple-Digit PE Stocks in Nifty50: Growth Story or Bubble Risk?

India’s stock market is seeing something unusual. For the first time, three stocks in the Nifty50 index are trading at price-to-earnings (PE) ratios above 100. This means investors are paying more than 100 years’ worth of current earnings to own shares in these companies. Is this a sign of bold belief in the future — or a warning of risky speculation?

How Do New Companies Fare Against Traditional Ones?

Leading the high-valuation pack is Eternal (Zomato), trading at a 484x PE. That’s nearly five centuries of earnings! It’s followed by Trent(124x) and Jio Financial(123x). In contrast, old-economy giant Coal Indiatrades at just 7x PE, highlighting the vast gap between traditional and modern companies.

This gap — from 7x to 484x — is one of the widest ever seen in the Nifty index.

What’s Driving These High PE Valuations?

 According to news reports, investors are betting on long-term growth. These companies are expected to expand into new markets, reinvest profits, and scale rapidly. That’s why they are priced so highly today — even if current profits are small.

However, high PE stocks need to consistently deliver strong performance. Any miss in their results can lead to a sharp fall in prices.

Reality Check of Trent Share Price

Take Trent share price for example. The Tata Group retail company was growing at 35% annually over five years. But this year, its growth slowed to just 20%, and the stock has dropped 24% year-to-date, including a 12% fall in one week. Basically, investors became extremely disappointed with the management’s guidance and sold their shares, which led to a rapid fall in prices.

Is Eternal Share Price and Jio Financial Share Price at A Similar Risk?

If a company keeps growing fast and stays profitable, high PE stocks can be justified. Some like Eternal are seen as “decade-long growth stories,” while others like Jio Financial are still unproven and in early stages. That makes them riskier bets. Investors should always conduct a fundamental analysis of these stocks and avoid chasing the hype without understanding the risks.

Read more: Hindustan Unilever (HUL) FY25 Earnings Results Decoded: Hers’s What You Need to Know!

Conclusion

India’s Nifty50 is seeing a shift — from value to high-growth stocks. But while investors are willing to pay a premium for future growth, it comes with risks. History shows that when expectations are not met, even the most loved stocks can crash hard. High PE stocks may look attractive but always check if the company’s growth story is real — and sustainable.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.