Is Eicher Motors overvalued or undervalued?

As of 20 June 2025, Eicher Motors' valuation grade has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently deemed overvalued. Key ratios include a PE ratio of 32.00, an EV to EBITDA of 32.02, and a Price to Book Value of 7.11, all of which suggest that the stock is priced at a premium compared to its earnings and assets.
In comparison to its peers, Eicher Motors' PE ratio is slightly higher than Bajaj Auto's 31.91 and significantly lower than TVS Motor Co.'s 60.02, while its EV to EBITDA is notably higher than Bajaj Auto's 22.09. The company's strong ROE of 22.23% and ROCE of 19.29% reflect solid operational performance, but these metrics do not mitigate the overvaluation concern. Additionally, Eicher Motors has outperformed the Sensex over the past year, with a stock return of 13.23% compared to the Sensex's 6.36%, reinforcing the notion of its current elevated valuation.