Is Chemcon Special. overvalued or undervalued?

As of 17 July 2025, Chemcon Special. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, with a PE ratio of 33.98, an EV to EBITDA ratio of 21.54, and a Price to Book Value of 1.66. These metrics indicate a significant premium compared to its peers, such as Godrej Industries with a PE of 39.33 and an EV to EBITDA of 30.95, and Deepak Nitrite, which has a PE of 38.3 and an EV to EBITDA of 24.78.
The valuation appears unsustainable given Chemcon's relatively low ROCE of 5.93% and ROE of 4.89%. While the stock has outperformed the Sensex over the past week and month, with returns of 14.39% and 15.88% respectively, its longer-term performance has lagged, with a 1-year return of -13.68% compared to the Sensex's 1.91%. This further reinforces the conclusion that Chemcon Special. is overvalued in the current market environment.