Is Carraro India overvalued or undervalued?

As of 3 October 2025, Carraro India has moved from an attractive to a fair valuation grade. The company is currently fairly valued, with a PE ratio of 31.52, an EV to EBITDA ratio of 17.04, and a Price to Book Value of 5.76. In comparison to its peers, Bosch is considered expensive with a PE ratio of 51.2, while Samvardhana Motherson is attractive with a PE of 32.96, indicating that Carraro India is positioned competitively within its industry.
Despite its fair valuation, Carraro India's recent stock performance has been underwhelming, with a year-to-date return of -25%, contrasting sharply with the Sensex's positive return of 3.93% over the same period. This underperformance may suggest that the market has not fully recognized the company's potential, despite its solid ROCE of 20.93% and ROE of 18.28%. Overall, while Carraro India is fairly valued, there are signs that it could be undervalued relative to its growth prospects and industry peers.