Is Pecos Hotels overvalued or undervalued?

As of 3 October 2025, the valuation grade for Pecos Hotels has moved from expensive to very expensive, indicating a significant increase in perceived valuation. The company appears to be overvalued based on its current financial metrics. Key ratios include a PE ratio of 29.82, an EV to EBITDA of 20.76, and a PEG ratio of 1.28, which suggest that the stock is trading at a premium compared to its earnings growth potential.
In comparison to its peers, Pecos Hotels has a lower PE ratio than Indian Hotels Co, which stands at 60.56, and ITC Hotels, which is at 65.13, but still reflects a high valuation within the leisure services sector. The high ROCE of 69.68% and ROE of 21.72% indicate strong profitability; however, these figures do not sufficiently justify the elevated valuation levels. Notably, while Pecos Hotels has outperformed the Sensex over the past three years with a return of 442.5%, its one-year performance shows a decline of 9.61%, further supporting the conclusion that the stock is currently overvalued.