Is JSW Steel overvalued or undervalued?

As of 27 October 2023, JSW Steel's valuation grade has moved from very attractive to fair, indicating a shift in its perceived value. The company is currently fairly valued, with a PE ratio of 64.98, a Price to Book Value of 3.09, and an EV to EBITDA of 14.20. In comparison to peers, JSW Steel's valuation metrics appear elevated, particularly when compared to the industry average, which typically features lower PE ratios and higher returns on equity.
When looking at specific peers, Tata Steel has a PE ratio of approximately 10.5, and Hindalco Industries shows a PE of around 12.5, highlighting JSW Steel's relative overvaluation in the market. Additionally, the company's recent stock performance has outpaced the Sensex, with a year-to-date return of 12.02% compared to the Sensex's 5.61%, suggesting strong market sentiment despite its fair valuation status.