Is Elecon Engg.Co overvalued or undervalued?

As of 5 June 2023, Elecon Engineering Co. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, with a PE ratio of 37.46, a Price to Book Value of 7.78, and an EV to EBITDA ratio of 27.57. In comparison to its peers, Thermax has a significantly higher PE ratio of 66.31, while BEML Ltd shows a PE of 62.34, indicating that Elecon's valuation is not only high but also less attractive relative to these competitors.
Despite Elecon's strong performance, with a ROCE of 34.25% and a ROE of 20.77%, the elevated valuation metrics suggest that the stock may not provide sufficient upside potential at its current price of 685.15. Additionally, while Elecon has outperformed the Sensex over the past year with a return of 24.22% compared to the Sensex's 7.60%, the current valuation raises concerns about future growth sustainability.