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While I agree that inflation has an impact on PE adversely to some extent one has to analyse the nature of inflation also. In case of cost push inflation I must admit that PE would be adversely effected across industries however if its a case of demand pushed inflation the story can be different. In such a scenario the companies performance could be better as a result investors may pay a premium for such industries. Again this is more economic than financial interpretation but that would be the way market would react.
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