Is Homesfy Realty overvalued or undervalued?

As of 12 August 2025, Homesfy Realty's valuation grade has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently overvalued, with a PE ratio of 61.71, an EV to EBIT ratio of 78.12, and an EV to EBITDA ratio of 46.78, all of which are considerably higher than industry norms.
In comparison to its peers, Homesfy Realty's PE ratio is notably higher than DLF's 39.1 and Lodha Developers' 41. This suggests that investors are paying a premium for Homesfy Realty relative to its earnings potential. Additionally, the company's return metrics, such as ROCE at 3.09% and ROE at 3.70%, further highlight its inefficiency in generating returns compared to its valuation. The stock has underperformed significantly over the past year, declining by 52.5% while the Sensex has only increased by 0.58%, reinforcing the notion that Homesfy Realty is currently overvalued.