Is Ramco Systems overvalued or undervalued?

As of 6 November 2025, the valuation grade for Ramco Systems has moved from risky to very expensive, indicating a significant shift in its market perception. The company is currently overvalued, with a PE ratio of 276.41, a Price to Book Value of 8.84, and an EV to EBIT of 113.08, all of which are substantially higher than industry norms. In comparison, TCS, a peer in the software products industry, has a PE ratio of 21.66 and an EV to EBITDA of 8.47, while Infosys shows a PE of 21.66 and an EV to EBITDA of 4.9, highlighting the stark contrast in valuation metrics.
Despite Ramco Systems' impressive stock performance, with a year-to-date return of 52.35% compared to the Sensex's 6.62%, the underlying financial ratios suggest that the stock is not justified at its current price level. The company's ROCE and ROE are notably negative at -35.64% and -29.04%, respectively, further supporting the conclusion that Ramco Systems is overvalued in the current market environment.