Is Laxmipati Engg overvalued or undervalued?

As of 3 September 2025, the valuation grade for Laxmipati Engineering has moved from risky to very expensive. This indicates a significant shift in perception regarding the company's valuation, suggesting that it is currently overvalued. The company's PE ratio stands at 32.47, while its EV to EBITDA ratio is 25.31, and the PEG ratio is notably low at 0.04, which typically suggests undervaluation, yet in this context, it reinforces the overvaluation sentiment given the high absolute values of the other ratios.
When compared to peers, Laxmipati Engineering's PE ratio is lower than that of Mazagon Dock at 50.51 and Cochin Shipyard at 54.29, both of which are also classified as very expensive. Despite Laxmipati's strong ROE of 75.83% and ROCE of 16.59%, the overall valuation metrics indicate that it is overvalued in the current market environment. Additionally, while Laxmipati has outperformed the Sensex significantly over the past year with a return of 350.63%, this performance does not justify its current valuation levels.