A P/E of 8 and a P/E of 46 Can Both Be Fair. IDX Sectors Don't Share One Multiple
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6 min read
Pull up two IDX stocks. One trades at a price-to-earnings ratio (P/E: the share price divided by how much profit the company earned per share over the last year) of about 8. The other trades at about 46. Your first instinct is that the 8 is cheap and the 46 is expensive. As of late August 2026, both are considered fair value by the analysts covering them.
That is not a contradiction. It is what a P/E ratio is actually for once you stop reading it as a single "cheap or expensive" number.
A P/E of 8 means investors are paying about Rp8 for every Rp1 of profit the company reported over the past year. A P/E of 46 means they are paying about Rp46 for that same Rp1 of profit. On its own, that tells you nothing about whether the stock is a good deal.
What it tells you is how much the market expects that Rp1 of profit to grow, or shrink, from here. A company whose profit is expected to fall next year gets a low multiple, because the market is not willing to pay much for earnings it does not trust to repeat. A company whose profit is compounding fast gets a high multiple, because that same Rp1 today is expected to become Rp1.40 or more within a year or two.
PT Bukit Asam (PTBA), a state-owned coal miner, traded at a P/E of roughly 8.3 times as of a July 2026 valuation screen from Rikopedia Research. That is a company reporting real, current profit at a genuinely low multiple, not a distressed business.
The low multiple reflects how coal earnings actually behave. A large share of PTBA's coal is sold domestically under the government's Domestic Market Obligation at regulated prices, which caps the upside even when global coal prices spike, while a swing in export prices can still move profit sharply from one year to the next. The market is not saying PTBA is a bad business. It is saying this year's profit is not a reliable guide to next year's, so it will not pay a premium for it.
Indofood CBP (ICBP), a completely different business making instant noodles and packaged food, landed in almost the same place: a 2026F P/E of about 8.2 times as of 18 August 2026, per Rikopedia Research, sitting close to two standard deviations below its own historical average of roughly 12.6 times. Freight costs and a weaker rupiah squeezed its margins through the first half of 2026 even as revenue grew. A coal miner and a noodle maker ending up at nearly the same multiple is the first clue that "sector" is not really the variable doing the work here. Uncertainty about near-term earnings is.
Bank Jago (ARTO), a fully app-based digital bank, traded at a forward P/E of about 46.5 times as of its Q1 2026 results, reported 24 April 2026 by Bareksa. That quarter's net profit came in at Rp86 billion, up 42% year on year, its third straight quarter of profit growth above 40%.
A 46x multiple sounds reckless next to PTBA's 8x, until you divide it by the growth rate behind it. That gives a PEG ratio (P/E divided by the annual earnings growth rate) of about 0.92, close to 1, per the same Bareksa report. A PEG near 1 is a rough signal that the price being paid roughly matches the growth being delivered, not that the stock is priced for fantasy. ARTO's high multiple is not the market ignoring valuation. It is the market pricing in a growth path that PTBA and ICBP simply do not have on the table right now.
Bank Central Asia (BBCA) sits between those two extremes. It traded at a P/E of 13.62 as of 26 August 2026, per a Q2 2026 valuation writeup from Kepoin Saham. Indonesia's banking industry overall traded at a P/E of 10.8 times as of 7 April 2026, below its own three-year average of 14.1 times, according to Simply Wall St's Indonesian financials coverage.
BBCA trades above the sector average because the market pays a quality premium for its consistency and its dominant retail-banking franchise, not because it is compounding profit anywhere near ARTO's pace. It is a mature, steadily growing bank, priced like one.
| Stock | What it does | P/E | Why the market prices it there |
|---|---|---|---|
| PTBA | State coal miner | ~8.3x | Domestic price caps, export prices swing year to year |
| ICBP | Packaged food | ~8.2x | Margins squeezed by freight and rupiah costs in 2026 |
| BBCA | Retail bank | ~13.6x | Mature, stable, priced above the banking average for quality |
| ARTO | Digital bank | ~46.5x | Three straight quarters of 40%+ profit growth |
For scale, the broader Indonesian market traded around 16.5 times earnings against a three-year average of about 20.6 times, per Simply Wall St's market-wide valuation snapshot, retrieved 31 August 2026. All four stocks above sit either well below or well above that midpoint, for reasons specific to each business.
The mistake is holding PTBA's 8x next to ARTO's 46x and concluding ARTO is "expensive." A useful comparison holds PTBA against other coal miners facing the same DMO pricing and export exposure, and holds ARTO against other digital-first lenders growing at a similar clip. Comparing across that gap tells you almost nothing, because the two companies are not being judged on the same question. One is being judged on how stable this year's profit is. The other is being judged on how fast next year's profit is arriving.
Before assuming a stock's P/E is "too high" or "too low," check what similar businesses in its own category are trading at, not the market average and not an unrelated stock that happens to share a headline number. NetWort's Explore page lets you screen IDX stocks side by side on valuation and other metrics, so you can make that comparison against the right peer group instead of an arbitrary one.