Is Konstelec Engg. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Konstelec Engineering has moved from fair to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued based on its financial ratios, with a PE ratio of 22.57, an EV to EBIT ratio of 12.58, and an EV to EBITDA ratio of 11.53. These figures suggest that the stock is trading at a premium compared to its earnings and cash flow generation capabilities.
In comparison to its peers, Konstelec's PE ratio is significantly lower than that of Rail Vikas, which stands at 58.02, and Tube Investments, which has a PE ratio of 93.38, both categorized as very expensive. However, it is also important to note that the company’s return on equity (ROE) is only 4.67%, which raises concerns about its profitability relative to its valuation. Additionally, while the stock has shown a strong performance in the short term with a 10.7% return over the past week, it has underperformed the Sensex significantly over the longer term, with a year-to-date decline of 45.76%. This combination of high valuation ratios and poor long-term performance reinforces the conclusion that Konstelec Engineering is overvalued.