Is Arabian Petrol. overvalued or undervalued?

As of 16 October 2025, Arabian Petroleum's valuation grade has moved from attractive to fair, indicating a shift in its perceived value. The company is currently fairly valued based on its financial metrics, with a PE ratio of 8.32, an EV to EBITDA of 6.30, and a ROE of 16.62%. Compared to its peers, Arabian Petroleum's valuation appears reasonable, especially when contrasted with Solar Industries, which has a PE ratio of 100.41, and Gujarat Fluorochemicals at 66.11.
Despite the recent performance, where Arabian Petroleum has underperformed the Sensex over the past year with a return of -16.5% compared to the Sensex's 2.46%, its financial ratios suggest it is not overvalued. The PEG ratio of 0.29 further supports this assessment, indicating potential for growth relative to its earnings. Overall, Arabian Petroleum is fairly valued in the current market context.