Is Ajax Engineering overvalued or undervalued?

As of 6 October 2025, Ajax Engineering's valuation grade has moved from very expensive to expensive, indicating a slight improvement but still suggesting a high valuation. The company is currently considered overvalued based on its key financial ratios, including a PE ratio of 28.24, an EV to EBITDA ratio of 20.91, and an EV to Sales ratio of 3.21.
In comparison to its peers, Ajax Engineering's PE ratio is significantly lower than that of Thermax, which stands at 56.23, and BEML Ltd, with a PE of 60.72, both categorized as very expensive. Despite its strong ROCE of 66.42% and ROE of 22.48%, the overall valuation metrics suggest that Ajax Engineering is overvalued in the current market environment. Additionally, the company's recent stock performance has lagged behind the Sensex, with a 1-week return of -6.09% compared to the Sensex's gain of 1.77%, further reinforcing the overvaluation narrative.