Is Adani Energy Sol overvalued or undervalued?

As of 25 July 2025, Adani Energy Sol has moved from a valuation grade of very expensive to expensive, indicating a slight improvement in its perceived value. However, the company is still considered overvalued. Key ratios include a PE Ratio of 40.98, an EV to EBITDA of 15.64, and a PEG Ratio of 1.16, which are significantly higher than its peers. For instance, NTPC, which is rated very attractive, has a PE Ratio of 13.8 and an EV to EBITDA of 10.38, highlighting the disparity in valuation.
In comparison to other companies in the sector, Adani Energy Sol's valuation metrics are elevated, with Adani Power also categorized as expensive at a PE of 17.0 and EV to EBITDA of 11.84. The company's recent stock performance has been underwhelming, with a 1-year return of -22.07%, contrasting sharply with the Sensex's gain of 1.78% over the same period, reinforcing the notion that the stock is overvalued in the current market environment.