Is KHFM Hospitality overvalued or undervalued?

As of 2 January 2025, KHFM Hospitality's valuation grade has moved from very expensive to does not qualify, indicating a significant shift in its market perception. The company is currently considered overvalued, with a PE ratio of 49.46, a price-to-book value of 3.64, and an EV to EBITDA ratio of 20.77. These ratios suggest that the stock is trading at a premium compared to its earnings and asset value.
In comparison with peers, KHFM Hospitality's PE ratio is notably higher than that of Apollo Hospitals Enterprise Ltd., which stands at 69.03, and Max Healthcare Institute Ltd., which has a PE of 100.29, both of which are classified as very expensive. The company's recent stock performance has also lagged behind the Sensex, with a year-to-date return of -14.85% compared to the Sensex's 6.26%. This further reinforces the view that KHFM Hospitality is currently overvalued in the market.