We have attempted to investigate the effect of the P/E Ratio on the shareholders' wealth. P/E Ratio measures how many times the Earning Per Share (EPS) is covered by the market Price. The high P/E Ratio indicates the hope for more security return compared to the competitors. It symbolises the possibility of growth in shareholders' wealth. Shareholders' wealth symbols are ROE(Return on Equity), ROA(Return on Assets), Market Price etc. In this study, ROE is chosen as the proxy for shareholders' wealth. Considering these two variables for nifty 50 Companies this study is executed. Employing the regression and correlation analysis it is evidenced that P/E Ratio has no substantial impact on the Shareholders’ wealth. With this inquiry, it is proved that P/E Ratio is not a significant factor for security analysis and therefore this factor may be ignored in the related decisions.