Is Misquita Engg. overvalued or undervalued?

As of 16 June 2025, the valuation grade for Misquita Engineering has moved from risky to very expensive. The company is currently overvalued based on its key financial ratios and peer comparisons. The PE ratio stands at 30.53, while the EV to EBIT and EV to EBITDA ratios are both at 29.82, indicating a premium valuation compared to its earnings and cash flows. Additionally, the ROCE and ROE are low at 2.18% and 2.33%, respectively, which raises concerns about the company's profitability relative to its valuation.
In comparison to its peers, Misquita Engineering's PE ratio is significantly lower than that of Rail Vikas at 66.62 and Tube Investments at 85.41, but still higher than Ircon International, which is fairly valued at a PE of 26.5. The PEG ratio of 0.20 suggests that the stock may be overvalued given its growth prospects. Furthermore, while the stock has shown a strong return of 128.31% over the past three years, it has underperformed the Sensex year-to-date, with a decline of 41.22% compared to the Sensex's gain of 4.68%. This underperformance reinforces the conclusion that Misquita Engineering is currently overvalued.