Is Kennametal India overvalued or undervalued?

As of 19 September 2025, the valuation grade for Kennametal India has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently deemed overvalued based on its high valuation metrics, including a PE ratio of 45.60, an EV to EBITDA ratio of 26.06, and a PEG ratio of 35.91. These figures suggest that the stock is trading at a premium compared to its earnings growth potential.
In comparison to its peers, Kennametal India's valuation stands out as very expensive, particularly when juxtaposed with Rail Vikas, which has a PE ratio of 63.64, and AIA Engineering, with a PE of 26.26. The high valuation ratios, coupled with the company's underperformance relative to the Sensex over various time frames, reinforce the conclusion that Kennametal India is overvalued in the current market environment.