Is HFCL overvalued or undervalued?

Jun 26 2025 08:01 AM IST
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As of June 25, 2025, HFCL is considered overvalued with a PE ratio of 70.94 and an EV to EBITDA of 29.96, significantly higher than its peers, and has underperformed with a year-to-date return of -22.77% compared to the Sensex's 5.91% return.
As of 25 June 2025, HFCL's valuation grade has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued, with a PE ratio of 70.94, an EV to EBITDA ratio of 29.96, and a Price to Book Value of 3.09. These ratios suggest that HFCL is trading at a premium compared to its earnings and book value.

In comparison to its peers, HFCL's valuation appears significantly higher; for instance, Indus Towers has a PE ratio of 11.24 and an EV to EBITDA of 6.25, while Railtel Corporation shows a PE of 63.33 and an EV to EBITDA of 36.77. This stark contrast reinforces the notion that HFCL is overvalued in its sector. Additionally, HFCL's recent stock performance has been underwhelming, with a year-to-date return of -22.77%, compared to a positive 5.91% return for the Sensex, further highlighting its valuation concerns.
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