Is Alphageo (India) overvalued or undervalued?

As of 12 February 2025, the valuation grade for Alphageo (India) has moved from very attractive to risky, indicating a significant shift in its investment appeal. The company is currently deemed overvalued given its negative PE ratio of -27.16, an EV to EBITDA of -13.89, and a ROCE of -12.01%. These ratios reflect a concerning financial position, suggesting that the company's earnings and operational efficiency are underperforming.
In comparison to its peers, Alphageo's valuation stands out negatively against companies like Reliance Industries, which has a PE ratio of 28.05, and ONGC, with a PE of 8.31. The stark contrast in these ratios highlights the challenges Alphageo faces in the oil sector. Additionally, the company's stock has underperformed relative to the Sensex, with a year-to-date return of -41.27% compared to the Sensex's 5.63%. This combination of poor financial metrics and relative underperformance reinforces the conclusion that Alphageo is overvalued at its current price of 259.00.