Is Esconet overvalued or undervalued?

As of 28 August 2025, Esconet's valuation grade has moved from fair to attractive, indicating a more favorable assessment of its market position. The company is currently considered undervalued, particularly in light of its PE ratio of 34.47, EV to EBITDA of 26.54, and ROCE of 19.44%. In comparison to its peers, TCS has a significantly lower PE ratio of 22.74 and Infosys stands at 22.86, suggesting that Esconet's valuation may not be justified given its higher ratios.
Despite the attractive grade, Esconet's stock has underperformed relative to the Sensex, with a year-to-date return of -47.73% compared to the Sensex's 3.62%. This stark contrast highlights the potential for recovery in Esconet's valuation as it aligns more closely with its peers in the software and consulting industry. Overall, the current valuation suggests that Esconet presents a buying opportunity for investors looking for growth in the technology sector.