Is Electro Force overvalued or undervalued?

Jun 09 2025 04:47 PM IST
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As of May 28, 2025, Electro Force is considered very expensive with a PE ratio of 90.68 and an EV to EBITDA of 83.88, significantly overvalued compared to peers like Rail Vikas Nigam Ltd. and Tube Investments of India Ltd., and has underperformed with a year-to-date return of -10.21% against the Sensex's 6.24% gain.
As of 28 May 2025, the valuation grade for Electro Force has moved from does not qualify to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a PE ratio of 90.68, an EV to EBITDA of 83.88, and a ROCE of only 1.20%. These ratios highlight a concerning disparity between the company's market price and its earnings potential.

When compared to peers, Electro Force's valuation stands out as particularly high; for instance, Rail Vikas Nigam Ltd. has a PE ratio of 69.76, while Tube Investments of India Ltd. sits at 87.5. This suggests that Electro Force is trading at a premium compared to its industry counterparts. Additionally, the company's recent stock performance has been lackluster, with a year-to-date return of -10.21%, contrasting sharply with the Sensex's gain of 6.24% during the same period, further reinforcing the notion that Electro Force is overvalued in the current market environment.
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