Is HFCL overvalued or undervalued?

As of 17 October 2025, HFCL's valuation grade has moved from expensive to fair, indicating a reassessment of its market position. The company is currently fairly valued, with a PE ratio of 321.50, an EV to EBITDA of 38.86, and a Price to Book Value of 2.67. In comparison to peers, Indus Towers has a significantly lower PE ratio of 9.49 and an EV to EBITDA of 5.35, while Affle 3i is marked as very expensive with a PE of 66.33, highlighting the disparity in valuation within the telecom equipment sector.
Despite the recent adjustment in valuation, HFCL has faced challenges, as evidenced by its year-to-date stock return of -33.17%, contrasting sharply with the Sensex's gain of 7.44% during the same period. This underperformance may suggest that while HFCL is now fairly valued, it still carries risks that investors should consider.