Is Arabian Petrol. overvalued or undervalued?

As of 5 September 2025, Arabian Petrol. has moved from a fair to an attractive valuation grade. The company is currently considered undervalued, supported by a PE ratio of 8.67, an EV to EBIT of 7.71, and a PEG ratio of 0.31. These ratios indicate that the stock is trading at a significant discount compared to its earnings growth potential.
In comparison to its peers, Arabian Petrol. stands out with a much lower PE ratio than Solar Industries, which is considered very expensive at 99.93, and also compares favorably to Godrej Industries, which has a PE of 40.09 and is rated as attractive. The company's strong ROCE of 18.60% and ROE of 19.71% further reinforce its solid financial performance. Despite recent stock returns lagging behind the Sensex, particularly over the year, the attractive valuation suggests that Arabian Petrol. presents a compelling investment opportunity in the current market.