Is Indian Emuls overvalued or undervalued?

As of 10 October 2025, the valuation grade for Indian Emuls has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently considered overvalued. Key ratios include a PE ratio of 16.31, an EV to EBIT of 13.94, and an EV to EBITDA of 12.35, which suggest that the stock is trading at a premium compared to its earnings and cash flow generation capabilities.
In comparison to its peers, Indian Emuls stands out with a PE ratio of 16.31, while Solar Industries and Gujarat Fluoroch exhibit much higher valuations at 101.06 and 65.7, respectively. However, Godrej Industries, which is rated attractive, has a PE of 35.91, indicating that Indian Emuls may not justify its current valuation against more reasonably priced competitors. Furthermore, the company's recent stock performance has been notably poor, with a year-to-date return of -48.25%, contrasting sharply with the Sensex's gain of 6.94%, reinforcing the notion that the stock is overvalued in the current market environment.