Is ITC Hotels overvalued or undervalued?

As of 23 July 2025, the valuation grade for ITC Hotels has moved from does not qualify to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a PE ratio of 72.55, an EV to EBITDA ratio of 41.40, and a Price to Book Value of 4.59. These ratios suggest that the stock is trading at a premium compared to its earnings and book value, raising concerns about its sustainability.
In comparison to its peers, ITC Hotels' PE ratio is notably higher than that of Indian Hotels Co, which stands at 62.97, and EIH at 31.5. This disparity highlights the overvaluation of ITC Hotels within the industry. Additionally, the company's recent stock performance has outpaced the Sensex, with a 1-month return of 14.95% compared to the Sensex's 1.01%, although this does not mitigate the overall valuation concerns.