Is Kalyan Jewellers overvalued or undervalued?

As of 31 January 2025, Kalyan Jewellers has moved from an attractive to an expensive valuation grade. The company is currently considered overvalued, with a PE ratio of 81.30, a Price to Book Value of 12.10, and an EV to EBITDA ratio of 40.48. These ratios indicate a significant premium compared to its peers, such as P N Gadgil Jewellers, which has a PE ratio of 35.11 and an EV to EBITDA of 22.20, and PC Jeweller Ltd., which stands at a PE ratio of 13.06 and an EV to EBITDA of 24.41.
The valuation metrics suggest that Kalyan Jewellers is trading at a substantial premium relative to its industry peers, which raises concerns about its current market price of 550.40. Additionally, the company's recent performance shows a year-to-date return of -28.21%, contrasting with a 5.58% return from the Sensex, further reinforcing the notion that the stock may be overvalued in the current market environment.