Is Oriana Power Ltd overvalued or undervalued?

As of 29 May 2025, the valuation grade for Oriana Power Ltd has moved from does not qualify to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, as evidenced by its high PE ratio of 27.33, a Price to Book Value of 29.53, and an EV to EBITDA of 20.24. These ratios suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Oriana Power Ltd's PE ratio is notably higher than that of NTPC Ltd, which stands at 13.78, and Adani Power Ltd, at 16.55. While Oriana boasts impressive ROCE and ROE figures of 132.41% and 108.05% respectively, the overall valuation metrics indicate that it is priced excessively in the current market. Additionally, despite a strong 1-month stock return of 63.73% compared to the Sensex's 4.63%, the long-term performance shows a decline of 2.44% over the past year, reinforcing the notion that the stock may be overvalued.