Is Divgi Torq overvalued or undervalued?

As of 12 November 2025, the valuation grade for Divgi Torq has moved from expensive to very expensive. The company is currently assessed as overvalued, with a PE ratio of 71.35, an EV to EBITDA of 39.17, and a Price to Book Value of 3.27. These ratios indicate a significant premium compared to its peers, such as Samvardh. Mothe. with a PE of 32.72 and an EV to EBITDA of 11.98, and Bosch, which has a PE of 48.27 and an EV to EBITDA of 43.48.
The company's financial metrics highlight a concerning valuation, especially given its low ROCE of 3.88% and ROE of 4.58%. While Divgi Torq has shown a stock return of 3.29% over the past week compared to the Sensex's 1.21%, its year-to-date return of 4.48% lags behind the Sensex's 8.10%. This underperformance, coupled with its very expensive valuation grade, reinforces the conclusion that Divgi Torq is overvalued in the current market environment.