Is Chothani Foods overvalued or undervalued?

As of 8 October 2025, the valuation grade for Chothani Foods has moved from risky to very expensive. The company is currently overvalued based on its financial metrics. Key ratios include a PE ratio of 48.34, an EV to EBIT of 49.41, and a ROCE of only 2.23%. These figures suggest that the stock is priced significantly higher than its earnings and capital efficiency would justify.
In comparison to its peers, Chothani Foods has a lower PE ratio than Nestle India, which stands at 75.42, but it is still higher than Hindustan Unilever's PE of 55.27. The EV to EBITDA ratio of 49.41 also places it in a similar range to its peers, but it does not provide a compelling case for investment given the overall high valuations across the sector. Notably, Chothani Foods has outperformed the Sensex significantly over the past year with a return of 71.1% compared to just 0.17%, yet this strong performance does not mitigate its current overvaluation status.