The Nifty below 3× book: same price, better balance sheet

In July 2026, the Nifty’s trailing price-to-book fell below 3× for the first time since December 2020. On a one-year forward basis, the multiple now sits below its long-period average as well.

The historical context makes this a notable level. From September 2008 to December 2020, 3× book was a ceiling the market rarely breached. The post-COVID cycle changed that: the multiple spent most of five years above it. It has now come back through that line.

The difference from 2020 sits underneath the multiple:

Data: NSE, DSP; as of 27 July 2026.

The same price-to-book, at a meaningfully higher return on equity, and nearly five turns cheaper on earnings. In December 2020, a buyer of the index at 3× book was buying 11.8% profitability; the same multiple today carries 14.5%.

One caution against reading too much into any dip below a long-term average: those averages include the crisis lows of 2008 and 2020, and crises are not forecastable. A multiple below its average tells you where prices sit against history. Where they bottom is a different question, and this measure has never answered it.

A second nuance: index ROE has stayed below 15% for the past two years even as book value grew faster than earnings. Depressed earnings growth explains part of the muted multiple, and it also means the multiple is resting on profitability that has room to normalise rather than on peak earnings.

What we’ll watch: whether the index ROE climbs back above 15% as recent earnings flow into the trailing numbers, and how long the forward P/B stays below its long-period average.