Is ION Exchange overvalued or undervalued?

As of 16 July 2025, the valuation grade for ION Exchange has moved from fair to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued. Key ratios supporting this assessment include a PE ratio of 40.14, an EV to EBITDA of 27.90, and a PEG ratio of 6.67, all of which are significantly higher than typical industry benchmarks.
In comparison to its peers, ION Exchange's valuation metrics are notably elevated. For instance, Thermax has a PE ratio of 68.5 and an EV to EBITDA of 46.77, while BEML Ltd shows a PE of 65.67 and an EV to EBITDA of 38.43, both categorized as very expensive. Despite ION Exchange's strong ROCE of 23.43% and ROE of 17.20%, the high valuation ratios suggest that the stock may not offer sufficient upside potential at its current price of 568.75, especially considering its recent performance relative to the Sensex, where it has underperformed on a year-to-date basis.