Is Prem. Explosives overvalued or undervalued?

Jun 09 2025 03:29 PM IST
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As of March 18, 2025, Prem. Explosives is considered very expensive and overvalued, with a high PE ratio of 111.53, Price to Book Value of 13.02, and EV to EBITDA ratio of 54.96, significantly exceeding its peers like Solar Industries and Godrej Industries.
As of 18 March 2025, the valuation grade for Prem. Explosives has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently deemed overvalued based on its high PE ratio of 111.53, a Price to Book Value of 13.02, and an EV to EBITDA ratio of 54.96. These ratios suggest that the stock is trading at a premium compared to its earnings and book value.

In comparison to its peers, Prem. Explosives has a substantially higher PE ratio than Solar Industries at 123.77 and Godrej Industries at 46.63, which reflects its very expensive valuation status. Additionally, the PEG ratio of 93.03 further emphasizes the overvaluation, particularly when juxtaposed with Godrej Industries' PEG of 0.03. Despite the company's strong returns over various periods, including a 3-year return of 855.06% compared to the Sensex's 49.14%, the current valuation metrics suggest that Prem. Explosives is overvalued in the market.
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