Is Magna Electrocas overvalued or undervalued?

As of 1 July 2025, Magna Electrocas has moved from a fair to an expensive valuation grade. The company appears to be overvalued based on its current metrics. Key ratios include a PE ratio of 23.14, an EV to EBITDA of 14.97, and a PEG ratio of 0.44, which suggests that while growth may be anticipated, the current price does not reflect a favorable investment opportunity.
In comparison with peers, Bharat Forge has a PE ratio of 59.54 and an EV to EBITDA of 24.34, indicating a higher valuation, while CIE Automotive is more attractive with a PE of 21.18 and an EV to EBITDA of 12.19. The significant divergence in valuations among these companies highlights that Magna Electrocas is positioned at a premium relative to its peers. Notably, the company's stock has outperformed the Sensex significantly over the past year, with a return of 171.77% compared to the Sensex's 5.31%, but this performance does not justify its current overvaluation.