Is Davangere Sugar overvalued or undervalued?

Oct 06 2025 08:05 AM IST
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As of October 3, 2025, Davangere Sugar is considered overvalued with a high PE ratio of 52.01, an EV to EBITDA of 15.99, and a low ROE of 3.30%, especially when compared to peers like Balrampur Chini and EID Parry, despite a strong weekly return of 8.44%.
As of 3 October 2025, the valuation grade for Davangere Sugar has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently deemed overvalued based on its high PE ratio of 52.01, an EV to EBITDA of 15.99, and a Price to Book Value of 1.72. These ratios suggest that the stock is trading at a premium compared to its earnings and book value, raising concerns about its valuation.

In comparison to its peers, Davangere Sugar's PE ratio significantly exceeds that of Balrampur Chini, which stands at 22.43, and EID Parry, at 23.87, both of which are considered fairly valued to very expensive. The company's return on equity (ROE) is notably low at 3.30%, further supporting the notion that it may be overvalued. Additionally, while Davangere Sugar has shown a strong weekly return of 8.44% compared to the Sensex's 0.97%, its year-to-date performance is concerning, with a decline of 19.97% against the Sensex's gain of 3.93%.
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