Is Force Motors overvalued or undervalued?

As of 14 May 2025, the valuation grade for Force Motors has moved from attractive to expensive. This indicates that the company is currently overvalued. Key ratios supporting this conclusion include a PE ratio of 30.31, an EV to EBITDA of 14.64, and a Price to Book Value of 5.43. When compared to peers, Ashok Leyland has a more favorable PE ratio of 22.92, while SML ISUZU shows an EV to EBITDA of 12.79, both suggesting that Force Motors is priced at a premium relative to its competitors.
Additionally, while Force Motors has demonstrated strong performance with a ROCE of 31.94% and a PEG ratio of 0.76, the high valuation metrics indicate that the stock may not sustain its current price levels. Recent stock performance has outpaced the Sensex, with a year-to-date return of 87.73% compared to the Sensex's 5.64%, but this may not justify the elevated valuation. Overall, the combination of high valuation ratios and peer comparisons leads to the conclusion that Force Motors is overvalued.