Is California Soft. overvalued or undervalued?

Nov 11 2025 08:09 AM IST
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As of November 10, 2025, California Soft. is considered overvalued with a PE ratio of 33.60 and low return metrics, despite a strong year-to-date return of 72.38%, indicating that investors may be overestimating its future growth potential compared to peers like TCS and Infosys.
As of 10 November 2025, the valuation grade for California Soft. has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued, with a PE ratio of 33.60, an EV to EBIT of 23.68, and an EV to EBITDA of 15.39. In comparison, TCS, which is rated attractive, has a PE ratio of 21.77, while Infosys, rated fair, has a PE ratio of 22.37, highlighting the premium California Soft. commands in its valuation.

The company's return metrics also reflect its overvaluation, with a ROCE of only 4.34% and a ROE of 3.06%, both significantly lower than industry peers. Despite a strong year-to-date return of 72.38% compared to the Sensex's 6.91%, the high valuation ratios suggest that investors may be overestimating future growth potential. Overall, California Soft. appears to be overvalued relative to its peers and financial performance.
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