Is Baba Food overvalued or undervalued?

As of 11 August 2025, Baba Food's valuation grade has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued. Key ratios include a PE ratio of 14.28, an EV to EBITDA of 8.95, and a Price to Book Value of 1.05, which, while not extreme, suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison with peers, Baba Food's PE ratio is significantly lower than that of Hindustan Unilever at 55.4 and Nestle India at 70.94, both of which are categorized as very expensive. This highlights that while Baba Food is overvalued, it is less so than some of its competitors. Furthermore, Baba Food has underperformed against the Sensex, with a year-to-date return of -36.9% compared to the Sensex's positive return of 3.98%, reinforcing the notion that the stock may be overvalued in the current market environment.