Expectations Gap: what today's prices imply about future earnings growth
Fundamentals through Oct 2026 (lag-adjusted by 60 days) · prices as of 9 Oct 2026 · 943 companies above ₹1,000 cr ranked.
Discount rate 12% · 10-year horizon · exit P/E 15x · dividends at each company's own payout
These figures are a mechanical translation of each company's current price-to-earnings ratio into the earnings growth that would be consistent with it, under fixed assumptions we chose (12% annual return, 10 years, exit P/E 15x). They are not forecasts, price targets or recommendations, and change materially with the assumptions. Delivered growth is historical and does not predict future results. ApnaFunda is not a SEBI-registered research analyst or investment adviser. Data may contain errors; verify with company filings before relying on it.
Largest gap between the growth the price implies and the growth delivered. Companies with market cap of at least ₹1,000 cr, positive earnings and at least six years of earnings history; banks and financials are ranked separately.
12+ months on the list · cyclical: normalised earnings used · pays out over half of earnings · over half of profit is other income · earnings history unstable
12+ months on the list · cyclical: normalised earnings used · pays out over half of earnings · over half of profit is other income · earnings history unstable
cyclical: normalised earnings used · pays out over half of earnings
Companies with negative trailing earnings, so no P/E. Ranked by the revenue growth the price-to-sales ratio implies if the company reached its sector's median net margin and traded at the exit P/E in 10 years. Never ranked against profitable companies.
price implies revenue growth of 21.9%/yr for 10 years at a 14% net margin (sector median) · delivered revenue growth 4.2%/yr
Banks, NBFCs and other financials, ranked among themselves. Earnings are leverage- and provisioning-driven, so delivered growth uses a first-to-last three-year average. The P/B cross-check applies the Gordon form to the 3-year median ROE.
An investor buys at today's trailing P/E, receives dividends equal to a fixed share of earnings for 10 years, then sells at an exit P/E of 15x. We solve for the constant annual earnings-per-share growth that makes that sequence worth exactly today's price at a 12% required return: P/E = payout × Σ xᵗ + exit P/E × xᴺ, with x = (1 + growth) / (1 + required return). With no dividends it reduces to growth = (1 + r) × (P/E ÷ exit P/E)^(1/N) − 1. Each company uses its own median payout over its last five fiscal years (zero if unknown).
Delivered growth is the fitted annual growth of net profit per share over the last up to ten fiscal years known at the time (a 60-day reporting lag is applied), or a first-three-versus-last-three-years average where earnings are cyclical or a loss year interrupts the series. Cyclical companies are valued on their five-year average earnings rather than trailing ones. The gap is implied growth minus delivered growth, in percentage points.
Sensitivity at a P/E of 40x and a 30% payout (exit P/E down, required return across):
Exit P/E / return
11%
12%
13%
12x
23.3%
24.4%
25.5%
15x
20.8%
21.9%
23.0%
20x
17.7%
18.7%
19.8%
Because a change in the required return or exit multiple moves every company's implied growth by nearly the same amount, the ranking is stable under the assumptions; only the levels move. The curve is also concave: doubling a P/E from 40x to 80x adds only about seven points of implied growth, so a 200x P/E does not mean ten times the growth. There is no consensus forecast in this data, so the comparison is with history only. Sector indices and "sector as one company" use today's constituents and are survivorship-biased.