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 increase in perceived overvaluation. The company is currently assessed as overvalued based on key financial metrics, including a PE ratio of 17.42, an EV to EBITDA ratio of 12.09, and a Price to Book Value of 4.00. These ratios suggest that the stock is trading at a premium compared to its earnings and book value. In comparison to its peers, NTPC, which is rated very attractive, has a PE ratio of 13.99 and an EV to EBITDA of 10.47, highlighting a more favorable valuation. Additionally, Power Grid Corporation, also rated very expensive, has a PE ratio of 17.95, further emphasizing Adani Power's relative overvaluation. While Adani Power has shown strong returns over the past three years, significantly outperforming the Sensex, its current valuation metrics indicate that it is overvalued in the market.