Is Banco Products overvalued or undervalued?

As of 3 September 2025, Banco Products has moved from a fair to an expensive valuation grade. The company appears to be overvalued based on its current financial metrics. Key ratios include a PE ratio of 20.83, an EV to EBITDA of 14.28, and a Price to Book Value of 6.92, which suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Banco Products' PE ratio is significantly lower than that of Bosch at 54.6 and Uno Minda at 71.9, both of which are also considered expensive. However, it is worth noting that Samvardhana Motherson, which is rated attractive, has a PE ratio of 29.77, indicating a more favorable valuation in the sector. Despite Banco Products' strong return metrics, including a 1Y return of 83.76% compared to the Sensex's -2.41%, the overall valuation suggests that the stock is overvalued in the current market context.