Is Blue Star overvalued or undervalued?

As of 22 July 2025, the valuation grade for Blue Star has moved from expensive to fair. The company is currently fairly valued based on its financial metrics. Key ratios include a PE Ratio of 62.32, an EV to EBITDA of 40.87, and a ROCE of 28.75%.
In comparison to peers, Blue Star's PE Ratio is higher than Voltas, which stands at 53.37, but lower than Johnson Controls, which is at 80.47. The PEG Ratio of Blue Star is 1.55, indicating a premium valuation relative to its growth prospects. Notably, while Blue Star has underperformed the Sensex year-to-date with a return of -17.10% compared to the Sensex's 5.18%, its long-term performance over three and five years shows significant outperformance, suggesting potential for recovery.