Is Greaves Cotton overvalued or undervalued?

As of 13 November 2024, Greaves Cotton's valuation grade has moved from very attractive to very expensive. The company appears to be overvalued based on its high PE ratio of 77.08, an EV to EBITDA of 33.01, and a Price to Book Value of 3.36. In comparison, Cummins India, also categorized as very expensive, has a significantly lower PE ratio of 46.90, while Kirloskar Oil, rated as attractive, shows a much more favorable PE of 27.32.
The current valuation metrics suggest that Greaves Cotton is not justified at its current price of 210.30, especially considering its low ROCE of 2.77% and ROE of 4.36%. Despite a strong one-year return of 64.55% compared to the Sensex's 7.57%, the overall financial ratios indicate that the stock is overvalued in the current market context.