Is Candour Techtex overvalued or undervalued?

As of 6 June 2025, the valuation grade for Candour Techtex has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued based on its high PE ratio of 165.72, an EV to EBITDA of 31.64, and a Price to Book Value of 5.76. These ratios significantly exceed those of its peers, such as Bajaj Steel Industries, which has a PE ratio of 23.88 and an EV to EBITDA of 16.46, highlighting the premium at which Candour Techtex is trading.
In comparison to other companies in the industry, Candour Techtex's financial metrics suggest that it is not a favorable investment at this time. The company's return on capital employed (ROCE) stands at a mere 2.20%, further emphasizing its overvaluation. While the stock has shown impressive returns over the longer term, outperforming the Sensex over 1 year (112.26% vs. 7.60%) and 5 years (250.95% vs. 143.03%), the current valuation metrics indicate that investors may want to exercise caution.