Is Primo Chemicals overvalued or undervalued?

As of 18 September 2025, the valuation grade for Primo Chemicals has moved from very attractive to attractive. The company is currently considered overvalued based on its financial ratios. The PE ratio stands at 33.24, while the EV to EBITDA ratio is 10.71, and the PEG ratio is notably low at 0.21, indicating potential growth at a reasonable price. However, these ratios suggest that the stock is priced higher compared to its earnings and growth potential.
In comparison to its peers, Primo Chemicals has a PE ratio that is lower than Godrej Industries, which stands at 40.62, but significantly higher than the very expensive peers like Solar Industries with a PE of 104.86. The EV to EBITDA ratio of 10.71 is also lower than Godrej Industries' 31.14, further supporting the notion that while Primo Chemicals is attractive in isolation, it is overvalued relative to its peers. Additionally, the company's stock has underperformed against the Sensex in the past year, with a return of -41.99% compared to the Sensex's slight gain of 0.08%, reinforcing the valuation concerns.