Is Amara Raja Ener. overvalued or undervalued?

As of 10 November 2025, the valuation grade for Amara Raja Energy has moved from attractive to fair, indicating a shift in its perceived value. The company is currently fairly valued, with a PE ratio of 24.22, an EV to EBITDA ratio of 11.23, and a Price to Book Value of 0.23. In comparison to its peers, Exide Industries is considered very expensive with a PE ratio of 38.05, while Eveready Industries is attractive with a PE of 28.05.
Despite its fair valuation, Amara Raja Energy has underperformed relative to the Sensex, with a year-to-date return of -19.78% compared to the Sensex's 6.91%. This underperformance, along with a low ROCE of 1.20% and ROE of 0.94%, suggests that while the company is not overvalued, it may face challenges in generating returns that justify its current valuation.