Is Castrol India overvalued or undervalued?

As of 4 July 2025, the valuation grade for Castrol India has moved from very expensive to expensive, indicating a slight improvement in perceived value. However, the company is currently considered overvalued based on its financial metrics. The PE ratio stands at 23.13, the Price to Book Value is 9.59, and the EV to EBITDA ratio is 15.83, all of which are relatively high compared to its peers.
In comparison, Gulf Oil Lubricants, which is rated very attractive, has a PE ratio of 17.31 and an EV to EBITDA of 12.28, while Veedol Corporation also rated very attractive, has a PE of 17.11. These figures suggest that Castrol India is trading at a premium compared to these competitors. Additionally, despite a strong dividend yield of 5.89% and an impressive ROCE of 126.91%, the overall valuation metrics indicate that Castrol India is overvalued in the current market context.