Is Aruna Hotels overvalued or undervalued?

As of 1 October 2025, the valuation grade for Aruna Hotels has moved from attractive to very attractive, indicating a significant improvement in its perceived value. The company is currently considered undervalued, especially when compared to its peers in the hospitality sector. Key ratios supporting this assessment include a PE ratio of 8.32, an EV to EBITDA of 28.32, and a PEG ratio of 0.05, which is notably low compared to the industry average.
In comparison to its peers, Aruna Hotels stands out with a much lower PE ratio than Indian Hotels Co, which has a PE of 60.41, and ITC Hotels, with a PE of 66.02, both categorized as very expensive. This stark contrast suggests that Aruna Hotels is trading at a significant discount relative to its competitors. Additionally, while the stock has underperformed in the short term, with a year-to-date return of -26.14% compared to a 3.64% return for the Sensex, the strong valuation metrics indicate potential for recovery and growth in the long term.