Is HFCL overvalued or undervalued?

As of 16 June 2025, HFCL's valuation grade has moved from expensive to fair, indicating a more favorable assessment. The company is currently fairly valued, with a PE ratio of 68.78, an EV to EBITDA of 29.10, and a Price to Book Value of 2.99. In comparison to its peers, Indus Towers is considered expensive with a PE ratio of 10.6, while ADC India is rated very attractive with a PE of 18.69, highlighting HFCL's relatively high valuation within the industry.
Despite its fair valuation, HFCL has underperformed against the Sensex, with a year-to-date return of -25.13% compared to the Sensex's gain of 4.68%. This performance, coupled with a low ROE of 4.35% and a PEG ratio of 0.00, suggests that while the stock may be fairly valued, there are concerns regarding its growth potential and profitability relative to its peers.