Is Jindal Hotels overvalued or undervalued?

As of 23 October 2024, Jindal Hotels has moved from a very attractive to an attractive valuation grade. The company is currently considered overvalued based on its high PE ratio of 57.82, a Price to Book Value of 3.39, and an EV to EBITDA of 14.85. In comparison, Indian Hotels Co has a PE of 66.81 and an EV to EBITDA of 39.96, while ITC Hotels shows a PE of 65.26 and an EV to EBITDA of 37.12, indicating that Jindal Hotels, despite its high valuation, is relatively more attractive than these peers.
The company’s ROCE stands at 8.10% and ROE at 5.86%, which are lower than what might be expected given its valuation. Additionally, Jindal Hotels has underperformed the Sensex year-to-date, with a return of -6.12% compared to the Sensex's 5.59%. This underperformance, coupled with the high valuation ratios, reinforces the conclusion that Jindal Hotels is overvalued in the current market environment.