Is Fidel Softech overvalued or undervalued?

As of 24 July 2025, the valuation grade for Fidel Softech has moved from fair to very attractive, indicating a significant improvement in its perceived value. The company appears to be undervalued based on its strong financial metrics. Key ratios include a PE ratio of 28.64, an EV to EBITDA of 20.35, and a PEG ratio of 0.54, suggesting that the stock is priced favorably relative to its growth potential.
In comparison with peers, Fidel Softech's PE ratio is higher than TCS's 23.13 and Infosys's 23.67, yet its PEG ratio is notably lower, highlighting its superior growth prospects relative to its price. Additionally, the company's return on capital employed (ROCE) stands impressively at 72.79%, further reinforcing its efficient capital utilization. While the stock has underperformed the Sensex in the short term, its remarkable 1-year return of 71.82% compared to the Sensex's 2.66% suggests strong underlying performance, supporting the conclusion that Fidel Softech is indeed undervalued.