Is Emerald Tyre overvalued or undervalued?

As of 17 September 2025, the valuation grade for Emerald Tyre has moved from very expensive to expensive, indicating a slight improvement but still reflecting high valuation concerns. The company is currently considered overvalued. Key ratios include a PE ratio of 26.65, an EV to EBITDA of 11.97, and a Price to Book Value of 2.08, which suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to peers, MRF has a PE ratio of 35.47 and an EV to EBITDA of 15.96, while Apollo Tyres presents a more attractive valuation with a PE of 29.22 and an EV to EBITDA of 9.67. This highlights that Emerald Tyre's valuation is higher than some competitors, reinforcing the overvaluation stance. Additionally, the company's stock has underperformed relative to the Sensex, with a year-to-date return of -28.4% compared to the Sensex's 7.13%, further supporting the conclusion that Emerald Tyre is overvalued.