Is HFCL overvalued or undervalued?

As of 27 October 2025, HFCL's valuation grade has moved from expensive to fair, indicating a shift in its market perception. The company is currently assessed as fairly valued. Key ratios include a PE ratio of 398.03, an EV to EBITDA of 56.60, and a Price to Book Value of 0.27, which suggests that while the company has a high earnings multiple, its asset valuation is relatively low.
In comparison to peers, HFCL's PE ratio is significantly higher than Indus Towers, which stands at 10.27, and Affle 3i, which has a PE of 66.99, indicating that HFCL is priced for high growth expectations despite its current performance metrics. Furthermore, HFCL's ROCE of 0.43% and ROE of 0.07% highlight challenges in generating returns relative to its equity and capital employed. Notably, HFCL has underperformed the Sensex year-to-date, with a return of -32.00% compared to the Sensex's 8.50%, reinforcing the notion that the stock may be overvalued based on its current financial performance.