Is Kaveri Seed Co. overvalued or undervalued?

As of 22 May 2025, Kaveri Seed Co. has moved from a fair to an expensive valuation grade. The company is currently considered overvalued based on its financial metrics. Key ratios include a PE ratio of 26.14, an EV to EBITDA of 23.10, and a PEG ratio of 11.02, which are significantly higher than those of its peers. For instance, Nath Bio-Genes has a PE ratio of 9.43 and an EV to EBITDA of 7.98, while Mangalam Seeds shows a PE of 19.17 and an EV to EBITDA of 14.50, indicating that Kaveri Seed Co. is trading at a premium compared to these competitors.
Despite a strong return of 63.45% year-to-date, which outpaces the Sensex's 5.62%, the valuation metrics suggest that investors may be overestimating future growth potential. With a dividend yield of only 0.38% and a high EV to Capital Employed ratio of 7.73, the current pricing does not seem justified when compared to its peers in the agricultural sector.