Is Kennametal India overvalued or undervalued?

As of 29 August 2025, the valuation grade for Kennametal India has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company appears to be overvalued based on its current financial ratios, which include a PE Ratio of 46.99, a Price to Book Value of 6.20, and an EV to EBITDA of 26.89. These figures suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Kennametal India's valuation metrics are notably high. For instance, Rail Vikas has a PE Ratio of 52.97, while Tube Investments stands at 87.78, both categorized as very expensive. However, when compared to more attractively valued companies like Ircon International, which has a PE Ratio of 22.58, Kennametal India’s metrics further reinforce the notion of overvaluation. Additionally, the company's stock has underperformed relative to the Sensex over the past year, with a return of -29.71% compared to the Sensex's -2.83%, further supporting the conclusion that Kennametal India is currently overvalued.