Is Godawari Power overvalued or undervalued?

Aug 28 2025 08:03 AM IST
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As of August 26, 2025, Godawari Power is considered expensive and overvalued despite a slight improvement in valuation perception, with key ratios indicating it trades at a premium compared to fundamentals, even though it has outperformed the Sensex over the past year.
As of 26 August 2025, the valuation grade for Godawari Power has moved from very expensive to expensive, indicating a slight improvement in its valuation perception. Despite this change, the company is still considered overvalued. Key ratios include a PE ratio of 21.53, an EV to EBITDA of 14.02, and a Price to Book Value of 3.25, which suggest that the stock is trading at a premium compared to its fundamentals.

In comparison to peers, Godawari Power's PE ratio is significantly lower than that of JSW Steel, which stands at 50.26, and Tata Steel at 39.87, both of which are categorized as fairly valued or attractive. Additionally, the company's ROCE of 22.97% and ROE of 16.53% are commendable but do not justify the current valuation levels. Notably, Godawari Power has outperformed the Sensex over the past year with a return of 23.39% compared to the Sensex's decline of 1.12%, yet this strong performance does not alleviate concerns regarding its overvaluation.
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