Is Allied Digital overvalued or undervalued?

As of 9 June 2025, the valuation grade for Allied Digital has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently overvalued based on its financial metrics. Key ratios include a PE Ratio of 33.89, an EV to EBITDA of 17.87, and a Price to Book Value of 1.81, all of which are elevated compared to its peers.
In comparison, TCS, which is rated attractive, has a PE Ratio of 25.51 and an EV to EBITDA of 17.83, while Infosys, rated fair, has a PE Ratio of 24.46 and an EV to EBITDA of 15.92. These comparisons highlight that Allied Digital's valuation is not justified relative to its peers. Additionally, the company's recent stock performance shows a decline of 17.87% year-to-date, contrasting with a 5.51% gain in the Sensex, further reinforcing the overvaluation narrative.