Is Mehul Colours overvalued or undervalued?

As of 29 August 2025, the valuation grade for Mehul Colours has moved from does not qualify to expensive, indicating a significant shift in its market perception. The company is currently assessed as overvalued. Key ratios include a PE ratio of 15.54, an EV to EBITDA of 12.21, and a ROE of 32.24%, which suggest that while the company is generating strong returns, its valuation metrics are not compelling compared to its peers.
In comparison, Sudarshan Chemicals has a PE ratio of 169.37 and an EV to EBITDA of 31.95, indicating a much higher valuation, while Ultramarine Pigments, which is considered attractive, has a PE of 18.03 and an EV to EBITDA of 11.65. Given these comparisons, Mehul Colours appears to be positioned unfavorably within its industry. Additionally, the recent stock performance has not outpaced the Sensex, reinforcing the notion that the stock may be overvalued at its current price of 81.00.