Is Rail Vikas overvalued or undervalued?

As of 20 June 2025, the valuation grade for Rail Vikas has moved from expensive to very expensive. This indicates that the company is currently overvalued. Key ratios highlight this valuation concern: the PE ratio stands at 63.57, the EV to EBITDA ratio is at 73.33, and the Price to Book Value is 9.27.
In comparison to its peers, Rail Vikas's valuation metrics are significantly higher; for instance, Tube Investments has a PE ratio of 82.99, while Ircon International, which is rated fairly valued, has a PE ratio of only 25.53. This stark contrast suggests that Rail Vikas is not only overvalued relative to its peers but also lacks a competitive edge in terms of profitability, as evidenced by its lower ROCE of 11.54% compared to industry standards. Recent stock performance has also been underwhelming, with a year-to-date return of -7.56%, contrasting with a 5.46% gain in the Sensex, further reinforcing the overvaluation narrative.