Is M & M overvalued or undervalued?

As of 24 June 2025, the valuation grade for M & M has moved from attractive to very attractive, indicating a strong positive shift in its perceived value. The company is currently considered undervalued based on its key financial ratios, which include a PE ratio of 30.28, an EV to EBITDA of 15.53, and a ROE of 16.78%.
In comparison to its peers, M & M's PE ratio is higher than Maruti Suzuki's 27.34 and Tata Motors' significantly lower 10.69, while its EV to EBITDA is more favorable than Maruti's 19.36 and Tata's 4.39. Notably, M & M's PEG ratio of 2.06 suggests a reasonable growth expectation relative to its price. Additionally, M & M's recent stock performance has outpaced the Sensex, with a 1-year return of 7.98% compared to the Sensex's 6.10%, reinforcing its valuation story.