Is GHCL overvalued or undervalued?

As of 8 May 2025, GHCL's valuation grade has moved from very expensive to fair, indicating a significant adjustment in its perceived market value. The company is currently fairly valued, with a PE ratio of 9.67, an EV to EBITDA ratio of 5.80, and a Price to Book Value of 1.73. These ratios suggest that GHCL is positioned competitively within its industry, particularly when compared to peers such as Aarti Industries, which has a higher PE ratio of 52.53, and Godrej Industries, which stands at 46.63.
In the context of its recent performance, GHCL has outperformed the Sensex with a 1-year return of 28.38% compared to the Sensex's 7.58%. This strong performance, coupled with a robust ROCE of 30.24% and ROE of 17.89%, reinforces the notion that GHCL is not only fairly valued but also demonstrates solid operational efficiency relative to its peers in the commodity chemicals sector.