In this paper, we revisit the relationship between market multiples and portfolio returns in the case of the Pakistani equity market throughout the crisis period of 2017 to 2023, marked by currency devaluation (over 50% decline in Pakistani rupee), inflation at 38%, political instability, and a 30-billion-dollar annual increase in external debt burdens. Despite extensive global research on market multiples such as price to book ratio (P/B), price to earnings ratio (P/E), price to sales ratio (P/S), price to cash flow (P/CF), enterprise multiple (EV/EBITDA), and earnings per share (EPS), very little research has been done in case of Pakistan, motivating this analysis of how macroeconomic shocks disrupt traditional valuation of dynamics? The data has been collected through simple random sampling of 118 non-financial firms (10 of which defaulted during the period) listed at the Pakistan Stock Exchange (PSX) to provide an overall nationwide view of the situation. The results showed high dispersion and negative values amid distress. Findings show that P/CF and EPS are robust predictors of holding period returns (HPR), with positive significance across years, whereas P/E and P/B show negative relationships. This addresses research gaps in emerging market crises and offers adaptive insights for investors.
Contemporary Journal of Social Science Review (2026) studied this question.