Is Ambuja Cements overvalued or undervalued?

As of 27 June 2025, the valuation grade for Ambuja Cements has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently classified as overvalued. Key ratios include a PE ratio of 33.87, an EV to EBITDA of 22.47, and a Price to Book Value of 2.65, all of which suggest that the stock is trading at a premium compared to its fundamentals.
In comparison to its peers, Ambuja Cements' PE ratio is lower than UltraTech Cement's 56.87 but significantly higher than ACC's attractive PE of 15.61, which highlights the disparity in valuation within the industry. Additionally, while Ambuja's ROCE stands at 7.55% and ROE at 7.81%, these figures do not justify its current valuation levels. Notably, over the past year, Ambuja Cements has underperformed the Sensex, with a return of -13.10% compared to the Sensex's 6.08%, reinforcing the view that the stock may be overvalued at this time.