Is Eicher Motors overvalued or undervalued?

Jun 22 2025 08:01 AM IST
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As of June 20, 2025, Eicher Motors is considered very expensive with a PE ratio of 32.00 and an EV to EBITDA of 32.02, indicating overvaluation compared to peers like Bajaj Auto and Hero MotoCorp, despite outperforming the Sensex year-to-date.
As of 20 June 2025, Eicher Motors has moved from an expensive to a very expensive valuation grade. The company is currently overvalued based on its key financial ratios, including a PE ratio of 32.00, an EV to EBITDA of 32.02, and a Price to Book Value of 7.11. These figures suggest that the stock is trading at a premium compared to its earnings and book value.

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, indicating a mixed competitive position. Additionally, while Hero MotoCorp is considered very attractive with a PE of 19.83, Eicher's valuation appears stretched. Notably, Eicher Motors has outperformed the Sensex with a year-to-date return of 14.49% compared to the Sensex's 5.46%, but this does not mitigate the concerns regarding its current overvaluation.
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