Is California Soft. overvalued or undervalued?

As of 23 October 2025, California Soft. has moved from a fair to an expensive valuation grade. The company is currently overvalued based on its financial metrics. Key ratios include a PE Ratio of 38.56, an EV to EBIT of 27.35, and a ROCE of only 4.34%. In comparison, peers such as TCS and Infosys have significantly lower PE Ratios of 22.12 and 22.58, respectively, indicating that California Soft. is trading at a premium relative to its industry counterparts.
The company's valuation appears unsustainable given its low return on equity of 3.06% and a high PEG Ratio of 1.18, suggesting that growth expectations are not justified by its earnings performance. Additionally, California Soft.'s recent stock performance has outpaced the Sensex, with a year-to-date return of 97.82% compared to the Sensex's 8.21%, but this does not mitigate the concerns regarding its current overvaluation.