Is Mega Nirman overvalued or undervalued?

As of 12 September 2025, the valuation grade for Mega Nirman has moved from risky to very expensive. The company is currently overvalued based on its financial metrics. Notably, the PE ratio stands at -8.12, the EV to EBITDA ratio is -5.55, and the ROCE is at a concerning -23.80%.
When compared to peers, Mega Nirman significantly lags behind, with Bajaj Finance showing a PE ratio of 35.82 and an EV to EBITDA of 19.41, while Life Insurance boasts a PE of 11.36 and an EV to EBITDA of 8.82. Additionally, despite Mega Nirman's recent stock performance, which has outpaced the Sensex over the past year with a return of 21.19% compared to the Sensex's -1.28%, the underlying financial ratios indicate that the stock is not justified at its current valuation.