Is HFCL overvalued or undervalued?

As of 3 November 2025, HFCL's valuation grade has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued, primarily due to its exceptionally high PE ratio of 402.59, which starkly contrasts with peers like Indus Towers at 11.02 and Affle 3i at 63.44. Additionally, HFCL's EV to EBITDA stands at 56.98 and its EV to Sales at 5.12, both of which are significantly higher than industry averages.
In comparison to its peers, HFCL's financial metrics suggest a lack of efficiency and profitability, with a ROCE of only 0.43% and a ROE of 0.07%. The company's recent performance has been underwhelming, with a year-to-date return of -31.22%, while the Sensex has gained 7.47% in the same period. This further reinforces the notion that HFCL is currently overvalued in the market.