Returns up, but P/E...down?

Recently while looking at a company, there was something rather peculiar. The company had very good returns in the last five years, but its price-to-earnings ratio (P/E) had fallen during the same period. This was clearly something new. (It wasn't actually, but it makes a good intro). Returns and P/E Whenever a stock has given great returns, most probably, its P/E also grows. Take the example of Berger Paints. Its five-year return is 21 per cent and its P/E went up from 54.2 to 71.9. This is quite normal, and this is how it should be, right? No, not necessarily.