Is Gem Aromatics overvalued or undervalued?

As of 26 September 2025, the valuation grade for Gem Aromatics has moved from fair to attractive, indicating a positive shift in its perceived value. The company appears to be undervalued given its key ratios, including a PE ratio of 23.55, an EV to EBITDA of 15.81, and a ROCE of 19.07%. In comparison to peers, Gem Aromatics stands out favorably against Godrej Industries, which has a significantly higher PE ratio of 39.96, and Solar Industries, which is deemed very expensive with a PE of 99.56.
Despite recent stock performance showing a decline of 11.57% over the past week compared to a 2.66% drop in the Sensex, the overall valuation metrics suggest that Gem Aromatics is positioned well within its industry. The PEG ratio of 0.00 further supports the notion of undervaluation, as it indicates no growth premium is currently being priced in, which could present an opportunity for investors looking for value in the specialty chemicals sector.