Is Emerald Tyre overvalued or undervalued?

As of 23 September 2025, the valuation grade for Emerald Tyre has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently considered overvalued. Key ratios include a PE ratio of 25.92, an EV to EBITDA of 11.70, and a Price to Book Value of 2.02, which suggest that the stock is trading at a premium compared to its earnings and asset values.
In comparison to its peers, Emerald Tyre's valuation stands out as particularly high, especially when compared to MRF, which has a PE ratio of 36.60 and an EV to EBITDA of 16.47, and Apollo Tyres, which is considered attractive with a PE ratio of 29.73 and an EV to EBITDA of 9.82. The recent performance of Emerald Tyre has also been underwhelming, with a year-to-date return of -30.38%, contrasting sharply with the Sensex's positive return of 6.45% in the same period, further reinforcing the notion that the stock is overvalued.