Is Havells India overvalued or undervalued?

As of 22 August 2025, Havells India has moved from a fair to an expensive valuation grade. The company is currently considered overvalued based on its high valuation ratios, including a PE ratio of 69.00, an EV to EBITDA of 45.49, and a PEG ratio of 48.23. These figures indicate that the stock is trading at a significant premium compared to its earnings growth potential.
In comparison with its peers, Havells India’s PE ratio is notably higher than that of Polycab India, which stands at 48.24, and KEI Industries at 50.98, both of which are also classified as expensive. The high valuation is further underscored by the company's relatively low dividend yield of 0.64% and a robust ROCE of 32.87%, which, while impressive, does not justify the elevated price levels. Additionally, despite a strong historical performance over the long term, Havells has underperformed the Sensex in the past year, with a return of -18.00% compared to the Sensex's 0.31%, reinforcing the notion that the stock may be overvalued at current levels.