Is Emerald Tyre overvalued or undervalued?

As of 18 September 2025, the valuation grade for Emerald Tyre has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently considered overvalued. Key ratios include a PE ratio of 26.12, an EV to EBITDA of 11.77, and a Price to Book Value of 2.04, which suggest that the stock is trading at a premium compared to its earnings and assets.
In comparison to its peers, Emerald Tyre's PE ratio is lower than MRF's 35.18 but higher than Apollo Tyres' 29.33, while its EV to EBITDA is also less favorable than MRF's 15.83. Notably, Balkrishna Industries is also categorized as very expensive with a PE of 33.26. The recent performance of Emerald Tyre has been poor, with a year-to-date return of -29.66%, contrasting sharply with the Sensex's gain of 7.52%, further reinforcing the notion that the stock is overvalued.