Is Nava overvalued or undervalued?

As of 20 June 2025, the valuation grade for Nava has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently considered overvalued. Key ratios include a PE ratio of 15.08, an EV to EBITDA of 8.66, and a PEG ratio of 0.47, which suggests that despite a relatively low growth expectation, the stock is priced at a premium compared to its earnings growth potential.
In comparison to its peers, NTPC is rated as very attractive with a PE of 13.88, while Adani Power is categorized as expensive with a PE of 15.84. This highlights that Nava's valuation is not only higher than NTPC but also sits at the upper end of the spectrum among its peers, reinforcing the overvaluation stance. Additionally, Nava's stock has significantly outperformed the Sensex over the past year, with a return of 57.82% compared to the Sensex's 6.36%, which may have contributed to its inflated valuation perception.