Is Gujarat Gas overvalued or undervalued?

As of 6 August 2025, the valuation grade for Gujarat Gas has moved from fair to expensive, indicating that the company is currently overvalued. The key ratios highlight this assessment, with a PE Ratio of 25.85, an EV to EBITDA of 15.77, and a Price to Book Value of 3.49, all of which are significantly higher than many of its peers. For instance, GAIL (India) boasts a PE of 11.47 and an EV to EBITDA of 9.13, while Indraprastha Gas has a PE of 17.1 and an EV to EBITDA of 13.14, both suggesting that Gujarat Gas is trading at a premium compared to these competitors.
The company's recent stock performance further reinforces this valuation narrative, with a year-to-date decline of 14% compared to a 3.08% increase in the Sensex. This underperformance, coupled with the elevated valuation ratios, suggests that Gujarat Gas is overvalued in the current market environment.