Is Kennametal India overvalued or undervalued?

As of 22 September 2025, the valuation grade for Kennametal India has moved from very expensive to expensive, indicating a slight improvement in its valuation outlook. The company is currently considered overvalued based on its high valuation ratios. The PE ratio stands at 45.34, while the EV to EBITDA ratio is 25.91, and the PEG ratio is an exceptionally high 35.71.
In comparison to its peers, Kennametal India's PE ratio is significantly higher than that of Ircon International, which has a PE of 25.65, and Engineers India, with a PE of 21.06. This suggests that Kennametal India is trading at a premium relative to its industry peers. Additionally, the company's recent stock performance has been underwhelming, with a year-to-date return of -27.56%, contrasting sharply with the Sensex's positive return of 5.15% in the same period. Overall, these factors reinforce the conclusion that Kennametal India is overvalued in the current market environment.