Is Rajasthan Gases overvalued or undervalued?

As of 14 November 2025, the valuation grade for Rajasthan Gases has moved from very expensive to risky. This indicates a significant shift in perception regarding the company's financial health and market position. Based on the analysis, Rajasthan Gases appears to be overvalued at its current price of 48.00, especially when considering its PE ratio of 52.56 and a negative EV to EBIT and EV to EBITDA of -388.44, which are notable outliers compared to its peers.
In comparison to its peers, Linde India has a PE ratio of 95.6, while Petronet LNG stands at a much lower PE of 11.19, highlighting the disparity in valuation metrics within the industry. Additionally, Rajasthan Gases' ROE of 9.03% is relatively modest, especially when contrasted with the performance of more attractive peers like Confidence Petro, which has a PE of 14.74. Despite recent strong stock performance against the Sensex, with a 3-year return of 432.74% compared to the Sensex's 37.22%, the underlying financial ratios suggest that Rajasthan Gases is not justified at its current valuation level.