Is Desco Infra. overvalued or undervalued?

As of 4 November 2025, the valuation grade for Desco Infra. has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently overvalued, with a PE ratio of 19.48, an EV to EBITDA of 13.69, and an EV to Sales ratio of 3.07. In comparison, peers like Larsen & Toubro, which is rated as attractive, has a much higher PE ratio of 33.64, while CG Power & Ind is also categorized as very expensive with a staggering PE of 110.25.
Despite Desco Infra.'s respectable ROCE of 19.43% and ROE of 14.76%, the valuation metrics suggest that the stock is trading at a premium compared to its peers, reflecting investor sentiment rather than fundamental value. The recent stock performance shows a notable decline of 19.6% over the past week, contrasting sharply with a modest 1.38% drop in the Sensex, further reinforcing the notion that Desco Infra. is currently overvalued in the market.