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. Key ratios include a PE ratio of 45.60, an EV to EBITDA of 26.06, and a PEG ratio of 35.91, all of which are substantially higher than typical industry benchmarks.
In comparison to its peers, Kennametal India stands out with a much higher PE ratio than Rail Vikas at 63.64 and AIA Engineering at 26.26, both of which are also classified as very expensive. Furthermore, while Kennametal India has a ROCE of 22.84% and a ROE of 13.19%, these figures do not sufficiently justify its high valuation compared to its peers. The company's recent stock performance has lagged behind the Sensex, with a year-to-date return of -28.20% compared to the Sensex's 5.74%, reinforcing the notion that the stock may be overvalued.