Is Agni Green overvalued or undervalued?

As of 17 September 2025, Agni Green's valuation grade has moved from very expensive to expensive, indicating a slight improvement in its valuation perception. However, the company remains overvalued based on its current financial metrics. The price-to-earnings (PE) ratio stands at 56.94, significantly higher than peers like NTPC, which has a PE of 13.61, and Tata Power Co., with a PE of 30.52. Additionally, Agni Green's EV to EBITDA ratio is 24.27, compared to NTPC's 10.72, further highlighting its overvaluation.
With a return on equity (ROE) of only 2.00% and a return on capital employed (ROCE) of 6.06%, Agni Green's financial performance does not justify its high valuation ratios. The PEG ratio of 0.87 suggests that while growth expectations may be present, they are not sufficient to support the current price levels. Given these metrics and the comparison with peers, Agni Green is deemed overvalued in the current market environment. The recent stock performance has been underwhelming, with a year-to-date return of -26.11%, contrasting sharply with the Sensex's positive return of 7.13%.