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 considered overvalued based on its financial ratios, which include a PE Ratio of 21.92, an EV to EBIT of 16.90, and an EV to EBITDA of 16.11. These figures suggest that the stock is trading at a premium compared to its earnings and cash flow generation capabilities.
In comparison to its peers, Patel Chem's valuation stands out as particularly high. For instance, Solar Industries has a PE Ratio of 98.93 and an EV to EBITDA of 60.88, while Godrej Industries, which is rated as attractive, has a PE Ratio of 40.99. This highlights that Patel Chem, despite being categorized as very expensive, is still more reasonably priced than some of its peers. The company's recent stock performance has lagged behind the Sensex, with a one-week return of -6.82% compared to the Sensex's -1.84%, reinforcing the notion of overvaluation.