Is Onix Solar overvalued or undervalued?

As of 28 August 2025, the valuation grade for Onix Solar has moved from very expensive to expensive, indicating a slight improvement in its perceived value. However, the company is still considered overvalued based on its current metrics. The PE ratio stands at 28.10, while the EV to EBITDA ratio is 26.80, both of which are significantly higher than those of its peers. For instance, Vedanta, which is categorized as very attractive, has a PE ratio of 12.57 and an EV to EBITDA of 5.21, highlighting the disparity in valuation.
Onix Solar's ROE is notably high at 61.35%, but this is coupled with a concerning ROCE of -68.00%, suggesting inefficiencies in capital utilization. The PEG ratio of 0.07 further complicates the valuation picture, as it indicates that the stock may be overvalued relative to its growth prospects. Overall, considering these ratios and the peer comparison, Onix Solar is assessed to be overvalued in the current market context. Despite a strong historical performance, with a 1Y return of 241.60% compared to a -2.08% return for the Sensex, the current valuation metrics do not support a favorable investment outlook.