RateGain Travel Technologies Limited’s (NSE:RATEGAIN) price-to-earnings (or “P/E”) ratio of 70.3x might make it look like a strong sell right now compared to the market in India, where around half of the companies have P/E ratios below 28x and even P/E’s below 16x are quite common. However, the P/E might be quite high for a reason and it requires further investigation to determine if it’s justified.
Recent times have been advantageous for RateGain Travel Technologies as its earnings have been rising faster than most other companies. The P/E is probably high because investors think this strong earnings performance will continue. If not, then existing shareholders might be a little nervous about the viability of the share price.