Is Chothani Foods overvalued or undervalued?

As of 31 October 2025, Chothani Foods has moved from a grade of risky to very expensive, indicating a significant shift in its valuation outlook. The company is currently overvalued, with a PE ratio of 310.80, an EV to EBIT of 44.58, and an ROE of just 0.90%. These metrics highlight a stark contrast to its peers, such as Hindustan Unilever with a PE ratio of 54.79 and Nestle India at 81.91, both of which are also categorized as very expensive but with considerably lower valuations.
The peer comparison further emphasizes Chothani Foods' overvaluation, as its EV to EBITDA ratio matches that of its peers at 44.58, yet its astronomical PE ratio suggests a disconnect in market expectations. Despite a strong historical performance with a 1Y return of 35.7% compared to the Sensex's 5.73%, the current valuation metrics indicate that investors may be overestimating future growth potential.