SOBHA.NS Sobha Ltd.

What the market pays today for one rupee of last year's profit.

P/E = Price ÷ (Net Income ÷ Diluted Shares Outstanding)

P/E divides the share price by earnings per share. If a share costs ₹300 and the company earned ₹15 per share, the P/E is 20 — buyers are paying twenty rupees for each rupee of annual profit.

A high P/E is not automatically 'expensive' and a low one is not automatically 'cheap'. A high number can mean the market expects profits to grow, or that the last year's profit was unusually low. A low number can mean the market expects profits to fall. P/E on its own says nothing about whether a price is justified — it is a starting question, not an answer.

P/E is undefined when a company made a loss, because dividing by a negative or zero profit produces a figure that cannot be read the normal way. StockProof shows N/A rather than a negative P/E.

In StockProof StockProof computes this from the latest cached price and the net income and diluted share count in the most recent filing on file. The historical P/E chart uses a different basis — filed annual EPS against an adjusted closing price — so the two figures are not directly comparable and are never differenced.

Introduction to the price-to-earnings ratio ↗ Khan Academy — external link, not StockProof content

How much profit the company generated per rupee of shareholders' own money.

ROE = Net Income ÷ Shareholder Equity

ROE divides net income by shareholders' equity — the money owners have put in plus the profits kept in the business rather than paid out. An ROE of 18% means the business turned every ₹100 of owners' capital into ₹18 of annual profit.

ROE is flattered by debt. A company that funds itself heavily with borrowing has less equity in the denominator, so the same profit produces a higher ROE. Two companies with identical ROE can carry completely different risk, which is why ROE is read next to Debt/Equity rather than on its own — and why the DuPont decomposition below exists.

In StockProof Equity here is the figure filed in the most recent annual or quarterly statement. For banks and NBFCs the composite differs from a manufacturer's, which is why the source-trace line under each figure names the exact filed line item used.

Splits ROE into three parts, so you can see whether it came from margin, efficiency, or debt.

ROE = (Net Income ÷ Revenue) × (Revenue ÷ Total Assets) × (Total Assets ÷ Equity)

The same ROE can be produced three very different ways. DuPont breaks it into Net Profit Margin × Asset Turnover × Equity Multiplier — how much profit each rupee of sales leaves, how much sales each rupee of assets generates, and how many rupees of assets sit on each rupee of equity.

A luxury brand reaches its ROE through margin. A supermarket reaches a similar ROE through turnover on thin margins. A leveraged lender reaches it through the equity multiplier. Only the third of those raises ROE by raising risk, and a single ROE number cannot tell you which of the three you are looking at.

This is why a rise in ROE is worth taking apart before it is treated as good news: an ROE that improved because the company borrowed more is a different fact from an ROE that improved because margins widened.

In StockProof StockProof does not yet render the three-way split as its own view — it is on the roadmap. The explanation is here because it is the right way to read the ROE figure shown beside it.

How many rupees the company has borrowed for each rupee of owners' money.

Debt / Equity = Total Debt ÷ Shareholder Equity

A Debt/Equity of 0.5 means fifty paise of borrowing per rupee of equity; a figure of 2.0 means two rupees of borrowing per rupee of equity. It is the plainest single measure of how much of the business is funded by lenders rather than owners.

Borrowing is not itself a fault. It magnifies outcomes in both directions: the same leverage that lifts returns in a good year deepens losses in a bad one, and interest has to be paid whether or not the year was good. What counts as a lot depends entirely on the industry — a utility with contracted cash flows and a cyclical commodity producer are not comparable on this number.

Financial companies are the clearest case: for a bank or an NBFC, borrowing IS the raw material of the business, so a Debt/Equity that would be alarming for a manufacturer is ordinary for a lender.

In StockProof Both figures come from the same filing, so the ratio is internally consistent even when the filing itself is restated later.

Return on ALL the long-term money in the business, borrowed as well as owned.

ROCE = EBIT ÷ (Total Equity + Total Debt)

ROCE divides operating profit (EBIT) by capital employed — equity plus debt. Where ROE asks what the owners earned, ROCE asks what the whole business earned on every rupee financed into it, whoever supplied that rupee.

Because the denominator includes debt, ROCE is not flattered by borrowing the way ROE is. That makes it the more comparable figure across companies with different capital structures, and the usual first check on whether a business is genuinely productive or merely leveraged.

A useful reference point is the company's own cost of borrowing: a business earning a ROCE below what it pays on its debt is consuming value on each additional rupee it employs.

In StockProof For lenders (banks, NBFCs, housing finance companies) the balance sheet has no current/non-current split and Finance Costs are close to a core operating cost rather than a financing item. StockProof still shows ROCE for those filers but prints an explicit caveat beside it — that caveat is not part of Learning Mode and shows whether or not this mode is on.