Is Prime Focus overvalued or undervalued?

As of 3 November 2025, Prime Focus has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, with a PE ratio of 77.10, a Price to Book Value of 18.72, and an EV to EBITDA ratio of 19.59. These ratios indicate a significant premium compared to its peers, such as PVR Inox, which has a PE ratio of 10.49, and Panorama Studios at 30.24, highlighting the disparity in valuation metrics within the industry.
In addition to the elevated valuation ratios, Prime Focus's ROCE stands at a mere 5.33% and ROE at 0.40%, suggesting inefficiencies in generating returns relative to its high market valuation. The company's stock has outperformed the Sensex, with a year-to-date return of 33.63% compared to the Sensex's 7.47%, but this performance does not justify its very expensive valuation status. Overall, the analysis indicates that Prime Focus is overvalued in the current market environment.