Is Indus Towers overvalued or undervalued?

As of 20 August 2025, the valuation grade for Indus Towers has moved from fair to expensive, indicating a shift in its market perception. The company is currently considered overvalued. Key financial ratios include a PE ratio of 9.66, an EV to EBITDA of 5.43, and a PEG ratio of 0.20, which suggest that while the company has strong earnings potential, its current valuation does not reflect this adequately compared to its peers.
In comparison to its industry peers, Indus Towers' PE ratio is lower than that of Affle 3i, which stands at 68.18, and Railtel Corporation at 53.74, both categorized as very expensive. Additionally, the company has a higher ROCE of 28.46% and ROE of 30.56%, showcasing operational efficiency relative to its peers. Despite a recent positive stock return of 3.71% over the past week compared to the Sensex's 1.64%, the longer-term performance indicates a decline, with a 1-year return of -18.55% versus the Sensex's 1.31%. This further reinforces the view that Indus Towers is currently overvalued in the market.