Is Castrol India overvalued or undervalued?

As of 8 July 2025, the valuation grade for Castrol India has moved from very expensive to expensive, indicating a slight improvement in its perceived value. However, the company is still considered overvalued at this stage. The key ratios highlight this perspective, with a PE ratio of 22.83, an EV to EBITDA of 15.61, and a PEG ratio of 3.01, all of which are relatively high compared to industry peers.
In comparison, Gulf Oil Lubricants, which is rated very attractive, has a PE ratio of 17.23 and an EV to EBITDA of 12.22, while Veedol Corporation also rated very attractive, shows a PE of 16.69 and an EV to EBITDA of 14.99. These figures suggest that Castrol India is trading at a premium compared to its peers. Additionally, the company's recent stock performance has been underwhelming, with a 1-year return of -13.44%, contrasting with the Sensex's gain of 4.69%, further reinforcing the notion that Castrol India is overvalued in the current market context.