Is Adani Power overvalued or undervalued?

As of 27 June 2025, Adani Power's valuation grade has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently overvalued, with a Price to Earnings (PE) ratio of 17.42, a Price to Book Value of 4.00, and an EV to EBITDA of 12.09. These ratios suggest that the stock is priced higher than its fundamental value, especially when compared to peers like NTPC, which has a PE ratio of 13.99, and Tata Power Co., with a PE of 32.31.
In the context of its performance, Adani Power has shown a strong return of 10.41% year-to-date, outperforming the Sensex's 7.58%. However, the substantial valuation metrics and the comparison with peers indicate that the stock is not justified at its current price level. Overall, the analysis suggests that Adani Power is overvalued in the current market environment.