Is Mewar Hi-Tech overvalued or undervalued?

As of 8 August 2025, Mewar Hi-Tech's valuation grade has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently deemed overvalued based on its financial metrics. Key ratios include a PE ratio of 9.27, an EV to EBITDA of 6.43, and a Price to Book Value of 3.01, which are notably lower than its peers. For instance, Thermax has a PE ratio of 58.13 and an EV to EBITDA of 38.32, while BEML Ltd shows a PE of 54.91 and an EV to EBITDA of 32.21, highlighting Mewar Hi-Tech's relative undervaluation in terms of earnings potential.
Despite its attractive ROE of 32.47% and ROCE of 19.97%, the overall valuation suggests that Mewar Hi-Tech is not aligned with its peers in the construction industry, which are trading at much higher multiples. The company's stock has underperformed relative to the Sensex, particularly with a year-to-date return of -18.17% compared to the Sensex's positive 2.20%, reinforcing the view that it is overvalued in the current market context.