P/B ratio: what it means and how to read it
What is P/B ratio?
Price ÷ book value per share. Book value is roughly what shareholders would get if the company sold everything at accounting values and paid off its debts.
Price to book compares what the market pays for a company with the net assets on its balance sheet. A P/B of 1 means the market values the company at exactly its accounting net worth; below 1, at less than the books say the assets are worth.
The ratio matters most where the balance sheet is the business: banks, lenders, insurers and holding companies, whose assets are loans and securities carried close to their real value. It matters least for businesses whose worth is in brands, software or distribution, none of which appear on a balance sheet at anything like their value. A consumer company at a P/B of 15 is not expensive for that reason alone.
How it is calculated
A worked example
Why does P/B ratio matter?
Most useful for banks, NBFCs and businesses with lots of physical assets.
What is a good P/B ratio?
Below 1 means the market values the company under its book value. Ask why: bad loans or weak returns are common reasons.
Judge P/B together with return on equity. A bank earning 16% on its equity deserves a P/B well above 1, because each rupee of book produces more than investors need; one earning 6% deserves to trade below book. A P/B under 1 is a bargain only if the book value is real and the returns are about to recover.
What are the common mistakes with P/B ratio?
What is a typical P/B ratio in India today?
The median across the 5200 listed companies that report it, as of 12 Oct 2026. Half sit above each figure and half below.
By company size
By industry
What is P/B ratio for India's largest companies today?
The latest figure for the largest companies with a page here. Each links to what the rest of that company's numbers mean.