Is Indosolar overvalued or undervalued?

As of 8 August 2025, the valuation grade for Indosolar has moved from does not qualify to very expensive, indicating a significant shift in perception. The company is currently overvalued based on its financial metrics. Key ratios include a PE Ratio of 28.70, an EV to EBIT of 24.04, and an EV to Sales of 5.03, all of which suggest that the stock is trading at a premium compared to its earnings and sales.
In comparison to its peers, Indosolar's valuation appears starkly high, especially when contrasted with Waaree Energies, which has a PE of 39.6, and Suzlon Energy, with a PE of 41.45. Both companies are also categorized as very expensive but do not exhibit the extreme ratios seen with Indosolar. Additionally, while Indosolar has shown impressive stock returns over the past three years, significantly outperforming the Sensex, the current valuation metrics indicate that the stock may not be justified at its current price level.