Is H.M. Electro overvalued or undervalued?

As of 30 May 2025, H.M. Electro's valuation grade has moved from does not qualify to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued based on its financial ratios, with a PE ratio of 11.73, an EV to EBIT of 8.60, and an EV to EBITDA of 8.52. These figures suggest that the stock is priced higher relative to its earnings and cash flow generation capabilities.
In comparison to its peers, H.M. Electro's valuation appears steep, especially when contrasted with IRCON International Ltd., which has a PE ratio of 28.25 and an EV to EBITDA of 23.27, indicating a more favorable valuation. Other peers such as Rail Vikas Nigam Ltd. and Tube Investments of India Ltd. are also categorized as very expensive, with PE ratios of 69.76 and 87.5, respectively. Given these comparisons and the recent stock performance, which has outpaced the Sensex over the past week, the overall assessment remains that H.M. Electro is overvalued in the current market environment.