Is Castrol India overvalued or undervalued?

As of 9 July 2025, the valuation grade for Castrol India has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently deemed overvalued. Key ratios highlight this assessment, with a PE ratio of 23.39, an EV to EBITDA of 16.02, and a PEG ratio of 3.08, all suggesting that the stock is priced 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 17.27 and an EV to EBITDA of 12.25, while Veedol Corporation also rated very attractive, shows a PE of 16.85 and an EV to EBITDA of 15.14. These comparisons further reinforce the notion that Castrol India is overvalued in its sector. Although the company has shown a strong return year-to-date of 13.15%, its performance over the past year has lagged behind the Sensex, with a decline of 10.81% compared to a 3.96% increase in the index.