Is Esconet overvalued or undervalued?

As of 7 July 2025, Esconet's valuation grade has moved from attractive to fair, indicating a shift in its market perception. The company is currently fairly valued based on its financial metrics, with a PE ratio of 41.20, an EV to EBITDA of 35.00, and a ROE of 18.74%. Compared to its peers, Esconet's valuation appears elevated; for instance, TCS has a PE ratio of 25.43 and Infosys at 25.27, both of which are significantly lower than Esconet's.
In the context of its industry, Esconet's valuation ratios suggest it may be overvalued relative to its peers, particularly when considering the PEG ratio of 1.89, which is higher than that of TCS and Infosys. The company's recent stock performance has been lackluster, with a year-to-date return of -37.57%, contrasting sharply with the Sensex's positive return of 7.68% over the same period. This further reinforces the notion that Esconet may not be positioned favorably in the current market landscape.