Is LGB Forge overvalued or undervalued?

As of 8 August 2025, LGB Forge's valuation grade has moved from risky to expensive, indicating a significant shift in its perceived value. The company appears to be overvalued based on its current financial metrics, including a PE ratio of -238.68, an EV to EBITDA of 77.85, and a Price to Book Value of 13.05. These ratios suggest that the market is pricing the stock at a premium despite the company's negative returns on capital and equity, with ROCE at -3.59% and ROE at -4.54%.
When compared to peers, LGB Forge stands out unfavorably. For instance, Bharat Forge, which is rated as fair, has a PE ratio of 52.86 and an EV to EBITDA of 22.19, while CIE Automotive, rated as attractive, boasts a PE of 19.3 and an EV to EBITDA of 11.39. This stark contrast highlights LGB Forge's overvaluation in the context of its industry. Additionally, the company's stock has underperformed relative to the Sensex, particularly year-to-date, where it has declined by 39.27% compared to a 2.20% increase in the index, further reinforcing the notion that LGB Forge is currently overvalued.