Is Exxaro Tiles overvalued or undervalued?

As of 23 September 2025, Exxaro Tiles has moved from a very attractive to an attractive valuation grade. The company is currently considered overvalued based on its high PE ratio of 72.59 and an EV to EBITDA ratio of 16.81, which significantly exceeds that of its peers. Notably, Kajaria Ceramics, which is classified as expensive, has a PE ratio of 55.47, while Cera Sanitary, also attractive, has a PE ratio of 32.54, indicating that Exxaro Tiles is trading at a premium compared to these competitors.
In addition to the high valuation ratios, Exxaro Tiles has a PEG ratio of 0.21, suggesting potential growth, but its return on capital employed (ROCE) is only 3.62%, which raises concerns about the efficiency of its capital use. The stock has shown a mixed performance against the Sensex, with a year-to-date return of 1.14% compared to the Sensex's 5.07%, and a 1-year return of 10.7%, outperforming the Sensex's decline of 3.33%. Overall, the combination of high valuation ratios and relatively low returns indicates that Exxaro Tiles is overvalued in the current market environment.