Is Adani Energy Sol overvalued or undervalued?

As of 19 September 2025, the valuation grade for Adani Energy Sol has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently deemed overvalued, with a PE ratio of 43.99, a Price to Book Value of 4.78, and an EV to EBITDA ratio of 16.49. These ratios suggest that the stock is trading at a premium compared to its fundamentals.
In comparison to its peers, Adani Energy Sol's valuation stands out, particularly against NTPC, which has a PE ratio of 13.71 and an EV to EBITDA of 10.77, indicating a much more attractive valuation. Other peers like Adani Green are also very expensive with a PE ratio of 85.73, but overall, Adani Energy Sol's high ratios reflect a market sentiment that may not be justified by its financial performance. Notably, while the stock has shown a return of 8.79% year-to-date, it has underperformed over the longer term, with a 1-year return of -10.61% compared to a slight decline in the Sensex.