Is ACE Alpha Tech overvalued or undervalued?

As of 29 August 2025, ACE Alpha Tech's valuation grade has moved from does not qualify to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued based on its financial ratios, with a PE ratio of 15.99, an EV to EBITDA of 11.78, and an EV to Sales of 10.38. These figures suggest that the stock price does not align well with its earnings and sales performance, especially when compared to peers like TCS, which has a PE ratio of 22.65, and Infosys, with a PE ratio of 22.39.
In comparison to its peers, ACE Alpha Tech's valuation metrics appear less favorable, as both TCS and Infosys exhibit higher earnings multiples, indicating stronger market confidence. The company's ROE stands at an impressive 50.67%, but this high return does not justify its current valuation when juxtaposed with the broader market trends. Notably, ACE Alpha Tech's stock has shown a positive return of 0.99% over the past week, contrasting with a decline in the Sensex, but this short-term performance does not mitigate the overall overvaluation concern.