Is California Soft. overvalued or undervalued?

As of 6 October 2025, California Soft. has moved from a fair to an expensive valuation grade. The company is currently considered overvalued, with a PE ratio of 24.52, an EV to EBIT of 22.37, and an EV to EBITDA of 14.54. In comparison to peers, TCS has a more attractive PE ratio of 21.94 and EV to EBITDA of 15.44, while Infosys stands at a PE of 22.48 and EV to EBITDA of 14.75, indicating that California Soft. is trading at a premium relative to these competitors.
The company's return metrics also highlight its overvaluation, with a ROCE of only 4.34% and ROE of 3.06%, which are significantly lower than industry standards. Despite strong recent stock performance, with a year-to-date return of 63.32% compared to the Sensex's 4.67%, the valuation metrics suggest that the current price of 15.86 is not justified given the underlying financials.