Is Chatha Foods overvalued or undervalued?

As of 14 November 2025, Chatha Foods' valuation grade has moved from attractive to very expensive, indicating a significant shift in its market perception. The company is currently considered overvalued based on its financial metrics. Key ratios include a PE Ratio of 33.38, an EV to EBITDA of 19.51, and a Price to Book Value of 2.37, all of which suggest that the stock is priced higher than its fundamental value.
In comparison to its peers, Chatha Foods' PE Ratio is notably lower than Hindustan Unilever's 53.87 and Nestle India's 81.83, both of which also fall into the very expensive category. However, despite this relative positioning, Chatha Foods' financial performance, with a ROCE of 8.07% and ROE of 7.10%, does not justify its current valuation. Additionally, the company's stock has underperformed significantly against the Sensex, with a year-to-date return of -36.36% compared to the Sensex's 8.22%, reinforcing the notion that it is overvalued at this time.