Is H.M. Electro overvalued or undervalued?

As of 9 September 2025, H.M. Electro has moved from an expensive to a very attractive valuation grade, indicating a significant improvement in its perceived value. The company is currently considered undervalued, with a PE ratio of 10.48, an EV to EBIT ratio of 7.25, and an EV to EBITDA ratio of 7.19. These metrics suggest that H.M. Electro is trading at a discount compared to its peers, particularly when contrasted with Rail Vikas, which has a PE ratio of 58.13, and Tube Investments, with a PE ratio of 94.1.
In addition to its favorable ratios, H.M. Electro boasts a robust ROCE of 18.07% and an ROE of 12.76%, further supporting its undervaluation status. The company's recent stock performance has outpaced the Sensex over the past week, with a return of 2.16% compared to the Sensex's 1.18%. Overall, H.M. Electro presents a compelling investment opportunity given its attractive valuation metrics and strong financial performance relative to its peers.