Is Bombay Burmah overvalued or undervalued?

Jun 09 2025 04:01 PM IST
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As of February 13, 2024, Bombay Burmah's valuation has shifted to very expensive, indicating it is overvalued at a price of 2014.35, despite a lower PE ratio compared to peers like Hindustan Unilever and Nestle India, and a strong ROCE of 50.63%.
As of 13 February 2024, the valuation grade for Bombay Burmah has moved from very attractive to very expensive, indicating a significant shift in its market perception. The company is currently deemed overvalued based on its financial metrics. Key ratios include a PE Ratio of 12.26, an EV to EBITDA of 4.40, and a ROE of 20.11%.

When compared to its peers, Bombay Burmah's valuation stands out as it has a much lower PE ratio compared to Hindustan Unilever at 53.88 and Nestle India at 75.2, both of which are also classified as very expensive. Despite a strong ROCE of 50.63%, the overall valuation suggests that the stock may not justify its current price of 2014.35, especially given its recent performance against the Sensex, where it has underperformed in the year-to-date period.
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