Is I Power Solution overvalued or undervalued?

As of 12 November 2024, the valuation grade for I Power Solution has moved from does not qualify to risky, indicating a shift in perception regarding its financial health. The company is currently assessed as overvalued. Key ratios include a PE ratio of 7.79, an EV to EBIT of -7.77, and a ROCE of just 0.45%. These figures suggest significant concerns about profitability and operational efficiency. In comparison to its peers, I Power Solution's PE ratio is substantially lower than that of TCS at 25.23 and Infosys at 24.32, both of which are considered attractive and fair, respectively. Additionally, the EV to EBITDA ratio of I Power Solution is notably negative, contrasting sharply with HCL Technologies, which stands at 16.52. The company's recent stock performance has outpaced the Sensex, with a 5-year return of 365.06% compared to the Sensex's 143.02%, but this does not mitigate the valuation concerns reflected in its financial ratios.