Is Archean Chemical overvalued or undervalued?

Jun 09 2025 04:39 PM IST
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As of November 22, 2022, Archean Chemical is considered very expensive and overvalued with a PE Ratio of 41.74 and an EV to EBITDA of 25.16, despite outperforming the Sensex recently, indicating it may not be a compelling investment at its current price of 644.70.
As of 22 November 2022, the valuation grade for Archean Chemical moved from does not qualify to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued based on its financial ratios, which include a PE Ratio of 41.74, an EV to EBITDA of 25.16, and a Price to Book Value of 4.25. These figures suggest that the stock is trading at a premium compared to its earnings and assets.

In comparison to its peers, Archean Chemical's PE Ratio is notably lower than Solar Industries India Ltd., which has a PE of 123.77, but higher than Godrej Industries Ltd. at 46.63. Additionally, the EV to EBITDA ratio of Archean is higher than that of Deepak Nitrite Ltd. at 24.57, further supporting the notion of overvaluation. Despite a recent strong performance relative to the Sensex, with a 1-month return of 15.95% compared to the Sensex's 3.81%, the overall valuation metrics indicate that Archean Chemical is not a compelling investment at its current price of 644.70.
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