Is HFCL overvalued or undervalued?

As of 24 October 2025, HFCL's valuation grade has moved from fair to expensive, indicating a shift in its perceived value. The company is currently overvalued, with a staggering PE ratio of 402.80, an EV to EBITDA ratio of 56.99, and a Price to Book Value of 0.27. These figures suggest that the stock is trading at a premium compared to its earnings and asset value.
In comparison to its peers, HFCL's valuation stands out significantly; for instance, Indus Towers has a PE ratio of 10 and an EV to EBITDA of 5.59, while Affle 3i is categorized as very expensive with a PE of 66.16. Additionally, HFCL's return on equity (ROE) is only 0.07%, which further highlights its overvaluation in the context of its financial performance. Despite a strong historical performance over five years with a return of 361.31%, recent trends show that HFCL has underperformed relative to the Sensex, which may reinforce concerns about its current valuation.