Is Arabian Petrol. overvalued or undervalued?

As of 27 June 2025, the valuation grade for Arabian Petroleum has moved from fair to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued based on its financial ratios. The PE ratio stands at 10.13, while the EV to EBITDA ratio is 7.87, and the PEG ratio is notably low at 0.36, suggesting that the stock may not be priced appropriately relative to its growth potential.
In comparison to its peers, Arabian Petroleum's valuation appears less attractive. For instance, Solar Industries is classified as very expensive with a PE ratio of 131.12, while Godrej Industries is rated as attractive with a PE of 42.84. The significant disparity in these ratios highlights that Arabian Petroleum may not offer sufficient value relative to its competitors. Additionally, the company's recent stock performance has outpaced the Sensex, with a 1-week return of 13.86% compared to the Sensex's 2.09%, which may suggest short-term investor enthusiasm despite the overall overvaluation.