Is the Nifty IT Index Overvalued or Undervalued? (June 2026)

Is the Nifty IT index overvalued or undervalued right now?

Undervalued, and by a wide margin. As of June 15, 2026, the Nifty IT index trades at a PE ratio of 18.99, which is 29.98% below its 7-year median PE of 27.12. On every historical window the site tracks, IT looks cheap relative to its own past: 31.01% below its 5-year median (27.52), 31.42% below its 3-year median (27.69), and 25.38% below its 1-year median (25.45). Of every major Indian index tracked at indexpe.in, IT is the furthest below its own historical median.

The numbers (June 2026)

For reference, the Nifty 50 trades at 20.37, which is 9.87% below its own 7-year median of 22.60.

Why this reading is unusual

For most of the last decade, the IT sector commanded a valuation premium over the broad market. Its 7-year median PE of 27.12 sits well above the Nifty 50's 7-year median of 22.60. Today that relationship has flipped. The Nifty IT PE of 18.99 is actually below the Nifty 50 PE of 20.37. A sector that historically traded at a premium to the index is now trading at a discount to it.

A low PE relative to history can mean two different things: prices have fallen, or earnings expectations have. In IT's case the discount is deep and consistent across every time window, which points to genuine caution about future earnings growth rather than a brief price dip. This page describes where the valuation sits relative to its own history. It is not a prediction or a recommendation.

FAQ

What is the current PE ratio of Nifty IT?

18.99 as of June 15, 2026, against a 7-year median of 27.12, so about 30% below its historical norm.

Is the Indian IT sector overvalued in 2026?

No. By historical PE it is significantly undervalued: at 18.99 it sits roughly 30% below its 7-year median and is the cheapest major Indian sector relative to its own history.

Why is Nifty IT cheaper than the Nifty 50 right now?

IT historically traded at a premium (its 7-year median PE of 27.12 is above the Nifty 50's 22.60). At 18.99 it now trades below the Nifty 50's 20.37, which suggests the market has priced in slower expected earnings growth for the sector.

What is a normal PE ratio for the Nifty IT index?

Its medians are 27.12 (7-year), 27.52 (5-year), 27.69 (3-year), and 25.45 (1-year).

Data from NSE, updated daily at indexpe.in. Last updated: June 15, 2026.

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a certified financial advisor before making investment decisions.