Is Megastar Foods overvalued or undervalued?

As of 20 October 2025, Megastar Foods has moved from a fair to a very attractive valuation grade, indicating a significant improvement in its perceived value. The company is currently considered undervalued, especially when compared to its peers. Key ratios include a PE ratio of 50.23, an EV to EBITDA of 14.06, and a ROCE of 7.53%.
In comparison to its peers, Megastar Foods stands out with a lower PE ratio than Hindustan Unilever, which has a PE of 57.29, and Nestle India, which has a PE of 82.76. This suggests that despite its high valuation metrics, Megastar Foods offers better relative value in the FMCG sector. Notably, the stock has underperformed the Sensex over the past year, with a return of -12.54% compared to the Sensex's 3.86%, reinforcing the argument for its undervaluation.