Is Emerald Tyre overvalued or undervalued?

As of 22 September 2025, the valuation grade for Emerald Tyre has moved from very expensive to expensive, indicating a slight improvement in its perceived value. The company is currently considered overvalued based on its financial metrics. Key ratios include a PE ratio of 25.28, an EV to EBITDA of 11.46, and a Price to Book Value of 1.97, which suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Emerald Tyre's PE ratio is significantly lower than MRF's 35.89 and Balkrishna Industries' 33.64, but higher than Apollo Tyres' attractive valuation at 29.40. The EV to EBITDA ratio also positions Emerald Tyre less favorably than Apollo Tyres and CEAT, which have ratios of 9.72 and 10.90, respectively. Additionally, the company's recent stock performance has been poor, with a year-to-date return of -32.72%, contrasting sharply with the Sensex's gain of 6.59% during the same period, reinforcing the notion that the stock is overvalued.