Is ERP Soft Systems overvalued or undervalued?

As of 16 April 2025, the valuation grade for ERP Soft Systems has moved from risky to very expensive. This indicates a significant shift in the perception of the company's valuation, suggesting that it is currently overvalued. The company’s PE ratio stands at 56.87, while its EV to EBITDA ratio is also high at 57.68, and the PEG ratio is notably elevated at 11.37, all of which reinforce the notion of overvaluation.
When compared to peers, ERP Soft Systems is positioned unfavorably against Firstsource Solutions Ltd., which has a PE ratio of 44.82 and an EV to EBITDA of 23.74, indicating a more attractive valuation. Similarly, eClerx Services Ltd. shows a PE of 32.59 and an EV to EBITDA of 21.00, further highlighting the disparity. Despite a recent 1-week stock return of 1.87% compared to the Sensex return of 1.36%, the overall trend shows that ERP Soft Systems has underperformed the Sensex year-to-date by 12.53%. This combination of high valuation ratios and poor relative performance suggests that ERP Soft Systems is overvalued in the current market.