Is Castrol India overvalued or undervalued?

As of 7 July 2025, the valuation grade for Castrol India has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently considered overvalued. Key ratios include a PE ratio of 23.27, an EV to EBITDA of 15.93, and a PEG ratio of 3.07, all of which suggest that the stock is trading at a premium compared to its earnings growth potential.
In comparison to its peers, Gulf Oil Lubricants, which is rated very attractive, has a PE ratio of 17.13 and an EV to EBITDA of 12.14, highlighting a more favorable valuation. Similarly, Veedol Corporation, also rated very attractive, shows a PE ratio of 16.90 and an EV to EBITDA of 15.18. These comparisons reinforce the notion that Castrol India is overvalued relative to its industry peers. Additionally, while Castrol India has outperformed the Sensex on a year-to-date basis with a return of 12.60% compared to the Sensex's 6.79%, its longer-term performance has lagged, particularly over the past year with a decline of 11.69%.