With a price-to-earnings (or “P/E”) ratio of 26.1x Wise Travel India Limited (NSE:WTICAB) may be sending bullish signals at the moment, given that almost half of all companies in India have P/E ratios greater than 31x and even P/E’s higher than 61x are not unusual. However, the P/E might be low for a reason and it requires further investigation to determine if it’s justified.
Recent times have been quite advantageous for Wise Travel India as its earnings have been rising very briskly. It might be that many expect the strong earnings performance to degrade substantially, which has repressed the P/E. If you like the company, you’d be hoping this isn’t the case so that you could potentially pick up some stock while it’s out of favour.