Is M & M overvalued or undervalued?

Jul 22 2025 08:02 AM IST
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As of July 21, 2025, M & M is considered overvalued with a high PE ratio of 31.26 and a valuation grade of attractive, despite outperforming the Sensex with an 18.15% return over the past year.
As of 21 July 2025, M & M's valuation grade has moved from very attractive to attractive, indicating a shift in market perception. The company is currently assessed as overvalued given its high PE ratio of 31.26, a Price to Book Value of 5.25, and an EV to EBITDA of 15.94. These ratios suggest that the stock is priced at a premium compared to its earnings and book value.

In comparison to peers, Maruti Suzuki has a PE ratio of 26.84 and an EV to EBITDA of 18.99, while Tata Motors shows a much lower PE of 10.91 and an EV to EBITDA of 4.48, highlighting M & M's relatively high valuation. Additionally, the company's recent stock performance has outpaced the Sensex, with a 1-year return of 18.15% compared to the Sensex's 1.98%, which may have contributed to the current overvaluation sentiment.
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