Is Nava overvalued or undervalued?

As of 5 March 2025, the valuation grade for Nava has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently considered overvalued based on its key financial ratios, including a PE ratio of 13.83, an EV to EBITDA of 7.91, and a PEG ratio of 0.43. These figures suggest that while the company has a reasonable earnings yield, its valuation does not align favorably with its growth prospects.
In comparison to peers, NTPC is rated very attractive with a PE of 13.78 and an EV to EBITDA of 10.37, while Adani Power is classified as expensive with a PE of 16.55. This peer analysis highlights that Nava's valuation metrics are not as compelling, reinforcing the conclusion that it is overvalued. Additionally, despite strong recent stock performance—Nava's stock has returned 80.82% over the past year compared to the Sensex's 7.62%—the current valuation does not justify the price levels, suggesting caution for potential investors.