Is Dalmia BharatLtd overvalued or undervalued?

As of 17 June 2025, the valuation grade for Dalmia Bharat Ltd has moved from very expensive to expensive, indicating a slight improvement in its valuation outlook. Despite this change, the company remains overvalued. Key ratios include a PE ratio of 50.35, an EV to EBITDA of 16.51, and a Price to Book Value of 2.22, all of which suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Dalmia Bharat's PE ratio is higher than that of Grasim Industries at 45.67 and Ambuja Cements at 32.52, both of which are considered expensive but offer better value relative to their earnings. The company's return on equity (ROE) stands at a low 4.42%, which further supports the view of overvaluation when juxtaposed with peers like ACC, which has a much more attractive valuation profile. Although Dalmia Bharat has outperformed the Sensex over the past year with a return of 9.36% compared to 5.96%, the current valuation metrics suggest that investors should approach with caution.