Is Mega Corp. overvalued or undervalued?

As of 20 June 2025, Mega Corp. has moved from a valuation grade of very expensive to expensive. The company is currently overvalued based on its financial metrics. The PE ratio stands at 51.20, significantly higher than its peers, with Life Insurance at 12.26 and Bajaj Finserv at 35.72. Additionally, the EV to EBITDA ratio is 20.20, while Bajaj Finance, another peer, has a ratio of 19.09, indicating that Mega Corp. is trading at a premium compared to its competitors.
The company's ROCE is only 5.42%, and the ROE is a mere 1.02%, which raises concerns about its profitability relative to its high valuation. Furthermore, the PEG ratio is at 0.00, suggesting that there is no growth expectation priced into the stock, which is unusual for a company with such a high PE ratio. Despite a strong 1-year return of 56.82%, the recent performance has lagged behind the Sensex, particularly in the year-to-date period, where it has declined by 36.48% compared to the Sensex's gain of 5.46%. Overall, these factors indicate that Mega Corp. is overvalued in the current market environment.