Is Gem Aromatics overvalued or undervalued?

As of 8 October 2025, Gem Aromatics has moved from a fair to an attractive valuation grade, indicating a more favorable assessment of its market position. The company is currently considered undervalued, with a PE ratio of 23.39, an EV to EBITDA of 15.72, and a ROE of 18.80%. In comparison to its peers, Gem Aromatics stands out with a significantly lower PE ratio than Solar Industries at 100.33 and Gujarat Fluoroch at 65.1, both categorized as very expensive.
Despite the attractive valuation, Gem Aromatics has faced recent stock declines, with a 1-month return of -20.33%, contrasting with a Sensex return of 1.22%. This divergence reinforces the notion that the stock may be undervalued relative to its intrinsic worth and the broader market. Overall, the company's strong ratios and favorable peer comparison suggest that it presents a compelling investment opportunity.