Is Castrol India overvalued or undervalued?

As of 10 July 2025, the valuation grade for Castrol India has moved from very expensive to expensive, indicating a slight improvement in perceived value. The company is currently considered overvalued. Key ratios include a PE ratio of 23.13, an EV to EBITDA of 15.83, and a PEG ratio of 3.05, 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 significantly lower PE ratio of 17.26, while Savita Oil Tech, rated fair, has a higher PE of 26.57. This highlights that Castrol India's valuation is not only higher than its peers but also reflects a lack of compelling growth prospects relative to its price. Additionally, while Castrol India has outperformed the Sensex year-to-date with a return of 11.96% compared to the Sensex's 6.46%, its one-year performance of -12.15% against the Sensex's 4.09% suggests potential concerns about its long-term value.