Is Pecos Hotels overvalued or undervalued?

As of 7 July 2025, Pecos Hotels has moved from a risky to a fair valuation grade. The company is currently fairly valued based on its financial metrics. Key ratios include a PE ratio of 19.99, an EV to EBITDA of 13.71, and a PEG ratio of 0.86, indicating a reasonable valuation relative to its growth prospects.
In comparison to its peers, Pecos Hotels stands out with a PE ratio significantly lower than that of Indian Hotels Co, which is at 63.43, and ITC Hotels, which has a PE of 65.07. This suggests that while Pecos Hotels is fairly valued, its peers are overvalued, reinforcing the attractiveness of its current price. Additionally, Pecos Hotels has shown a strong return on capital employed (ROCE) of 70.65% and a return on equity (ROE) of 25.78%, further supporting its valuation. Despite recent underperformance compared to the Sensex, particularly in the year-to-date period, the long-term growth potential remains promising.