Is Arrowhead Sepera overvalued or undervalued?

As of 4 November 2025, Arrowhead Sepera's valuation grade has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently assessed as overvalued based on its high PE ratio of 40.17, an EV to EBIT of 18.08, and an EV to EBITDA of 17.59. These ratios suggest that the market is pricing the company at a premium compared to its earnings and cash flow generation capabilities.
In comparison to its peers, Arrowhead Sepera's PE ratio is notably lower than that of Rail Vikas at 56.98 and Tube Investments at 89.09, both of which are categorized as very expensive. However, the overall valuation metrics indicate that Arrowhead Sepera is still positioned at a premium relative to its industry, reinforcing the conclusion of overvaluation. Additionally, the company's stock has underperformed the Sensex significantly over the past year, with a return of -46.01% compared to the Sensex's 5.94%, further supporting the notion that the stock is currently overvalued.