Is Ducol Organics overvalued or undervalued?

As of 8 October 2025, Ducol Organics has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, with a PE ratio of 58.65, an EV to EBITDA ratio of 33.97, and an EV to Sales ratio of 3.20. These ratios indicate a significant premium compared to its peers, such as Sudarshan Chemicals, which has a PE ratio of 119.32, and Meghmani Organics, which is rated fair with a PE ratio of 111.74.
The valuation metrics suggest that Ducol Organics is not justified at its current price of 166.70, especially given its low ROCE of 7.00% and ROE of 5.12%. In comparison, other companies in the industry, like Ultramarine Pigments, are considered very attractive with a PE ratio of 17.20. Additionally, Ducol Organics has outperformed the Sensex with a YTD return of 22.89%, but this does not mitigate the concerns regarding its high valuation relative to its earnings potential.