Is Kennametal India overvalued or undervalued?

Sep 20 2025 08:05 AM IST
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As of September 19, 2025, Kennametal India is considered very expensive and overvalued with a PE ratio of 45.60, significantly higher than its peers, and despite strong returns, its stock has declined by 28.20% year-to-date.
As of 19 September 2025, the valuation grade for Kennametal India has moved from expensive to very expensive, indicating a significant concern regarding its current market valuation. The company is assessed as overvalued, with a PE ratio of 45.60, a Price to Book Value of 6.02, and an EV to EBITDA ratio of 26.06. 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 PE ratio is notably higher than that of Ircon International, which stands at 26.09, and AIA Engineering, with a PE of 26.26. Furthermore, the PEG ratio of 35.91 indicates that the stock may not be justified by its growth prospects. Despite a strong ROCE of 22.84% and a ROE of 13.19%, the recent performance of the stock, which has declined by 28.20% year-to-date compared to a 5.74% gain in the Sensex, reinforces the notion that Kennametal India is overvalued in the current market environment.
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