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 appears to be undervalued based on its strong financial ratios, including a PE ratio of 8.67, an EV to EBIT of 7.71, and a PEG ratio of 0.31, indicating solid earnings growth potential relative to its price.
In comparison to its peers, Arabian Petrol. stands out with a significantly lower PE ratio than Solar Industries, which is very expensive at 99.93, and also compares favorably to Godrej Industries, which has a PE of 40.09. With a return on equity (ROE) of 19.71% and a return on capital employed (ROCE) of 18.60%, the company's performance metrics further support its attractive valuation. Notably, while Arabian Petrol. has faced a year-to-date stock return of -10.41%, it has outperformed the Sensex in the past week, suggesting potential for recovery.