Is Patel Chem overvalued or undervalued?

As of 29 August 2025, Patel Chem's valuation grade has moved from does not qualify to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a PE ratio of 21.92, an EV to EBIT of 16.90, and an EV to EBITDA of 16.11. In comparison to its peers, Solar Industries has a much higher PE ratio of 98.93, while Godrej Industries, which is rated attractive, has a PE ratio of 40.99, highlighting that Patel Chem's valuation is not justified given its performance metrics.
Despite a strong ROCE of 29.33% and ROE of 29.86%, the elevated valuation ratios suggest that investors may be overestimating future growth potential. The recent stock performance has underperformed against the Sensex, with a 1-week return of -6.82% compared to the Sensex's -1.84%, reinforcing the notion that the stock is currently overvalued in the market.