Is Intellect Design overvalued or undervalued?

As of 28 May 2025, the valuation grade for Intellect Design has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued based on key financial ratios, including a PE ratio of 48.56, an EV to EBITDA of 29.92, and a PEG ratio of 24.27. These figures suggest that the stock is trading at a significant premium compared to its earnings growth potential.
In comparison to its peers, Intellect Design's valuation metrics stand out unfavorably. For instance, TCS, which is rated attractive, has a PE ratio of 25.23 and an EV to EBITDA of 17.63, while Infosys, rated fair, shows a PE of 24.32 and an EV to EBITDA of 15.83. The stark contrast in these ratios highlights that Intellect Design is priced significantly higher than its more reasonably valued competitors. Although Intellect Design has outperformed the Sensex on a year-to-date basis with a return of 19.17% compared to the Sensex's 5.65%, the current valuation suggests that investors may be paying too much for future growth.