Is 3i Infotech overvalued or undervalued?

As of 16 May 2025, the valuation grade for 3i Infotech has moved from expensive to attractive, indicating a shift in perception regarding its market value. The company is currently considered undervalued, particularly when compared to its peers. Key ratios include a PE Ratio of 13.08, an EV to EBITDA of 12.17, and a PEG Ratio of 0.09, which suggests that the stock is trading at a significantly lower valuation relative to its growth potential.
In comparison to its peers, TCS has a PE Ratio of 25.23 and an EV to EBITDA of 17.63, while Infosys shows a PE Ratio of 24.32 and an EV to EBITDA of 15.83. These comparisons highlight that 3i Infotech is trading at a substantial discount relative to its competitors in the software and consulting industry. Despite recent underperformance against the Sensex, particularly over the past year with a return of -33.38% versus the Sensex's 7.57%, the current valuation metrics suggest that 3i Infotech presents a compelling investment opportunity.