Is EIH overvalued or undervalued?

As of 11 August 2025, the valuation grade for EIH has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently considered overvalued. Key ratios include a PE ratio of 29.06, an EV to EBITDA of 20.88, and a PEG ratio of 1.31, all of which suggest that EIH's stock price is high relative to its earnings and growth potential.
When compared to peers, EIH's valuation appears steep, especially against Indian Hotels Co, which has a PE ratio of 62.23, and ITC Hotels, with a PE ratio of 68.13. Despite EIH's strong ROCE of 23.06% and ROE of 16.48%, its current market performance has lagged behind the Sensex, with a year-to-date return of -13.55% compared to the Sensex's 3.15%. This further reinforces the notion that EIH is overvalued in the current market environment.