Is Rainbow Foundat. overvalued or undervalued?

Aug 13 2025 08:02 AM IST
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As of August 12, 2025, Rainbow Foundation is considered expensive and potentially overvalued, with a PE ratio of 77.84, significantly higher than its peers DLF and Lodha Developers, raising concerns about the sustainability of its impressive stock returns.
As of 12 August 2025, the valuation grade for Rainbow Foundation has moved from very expensive to expensive. The company appears to be overvalued based on its high valuation metrics, including a PE ratio of 77.84, an EV to EBITDA ratio of 23.09, and a Price to Book Value of 8.55. These figures suggest that the stock is trading at a significant premium compared to its earnings and book value.

In comparison to its peers, Rainbow Foundation's PE ratio is notably higher than that of DLF, which stands at 39.1, and Lodha Developers, which has a PE ratio of 41. This stark contrast indicates that Rainbow Foundation may be overvalued relative to its industry peers. Additionally, while the company has shown impressive stock returns over the past year, outperforming the Sensex significantly, the current valuation metrics raise concerns about sustainability and potential corrections in the future.
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