Kathmandu: As the share prices of commercial banks are decreasing in the secondary market and their PE ratio is also decreasing. According to share 'Screening Software Smart Wealth Pro', according to the share price of Chaitra 2080, the PE ratio of the bank group is 15.86 on average.

According to the data, 10 out of 19 banks have a PE ratio of less than 15. Among the banks, Prime Commercial Bank has the lowest PE ratio of 8.44 times. Similarly, PE ratio of NMB Bank is 11.74, Machhapuchchhre is 12.52, Agriculture Development is 12.86, Himalayan is 13.25. Of course, they are undervalued. Nepal Bank has the most PE. Its said ratio is 26.65.

Comparatively, the PE of all banks is much lower than other listed groups and companies. As their share price did not increase, PE was seen low. The PE ratio is of great help in informing whether a company or any group is overvalued or undervalued. Companies with a PE of less than 20 are considered good for investment.

The PE ratio gives information about how many rupees should be invested to earn 1 rupee of profit. For example, if a company's PE ratio is 10 times, it means that to earn 1 rupee in its shares, you have to invest 10 rupees.