Is Gujarat Gas overvalued or undervalued?

As of 5 May 2025, the valuation grade for Gujarat Gas has moved from attractive to fair, indicating a shift in its perceived value. The company is currently fairly valued, with a PE ratio of 28.58, an EV to EBITDA of 17.35, and a Price to Book Value of 3.87. In comparison to its peers, GAIL (India) is rated very attractive with a PE ratio of 11.9, while Indraprastha Gas holds an attractive rating with a PE of 17.1, highlighting that Gujarat Gas is trading at a premium relative to these competitors.
Despite the recent price fluctuations, where Gujarat Gas has shown a 4.31% return over the past week compared to a 1.39% return of the Sensex, its year-to-date performance of -3.49% suggests it has underperformed the broader market. Overall, while the company maintains a fair valuation, the elevated ratios compared to peers indicate that it may not present a compelling investment opportunity at current levels.