Is Rane (Madras) overvalued or undervalued?

As of 18 July 2025, Rane (Madras) has moved from a fair to an attractive valuation grade, indicating a shift in its perceived value. The company is currently considered undervalued, particularly when analyzing its key ratios: it has a PE ratio of 171.37, an EV to EBITDA ratio of 14.63, and a ROCE of 7.61%. These figures suggest that while the company's earnings and capital efficiency may not be optimal, its valuation relative to peers presents a more favorable outlook.
In comparison to its peers, Rane (Madras) stands out with a significantly higher PE ratio than Samvardhana Motherson, which has a PE of 28.02, and a more favorable EV to EBITDA ratio than Bosch, which is at 48.41. This positions Rane (Madras) as attractive within the auto components sector, especially considering its recent stock performance, which has outpaced the Sensex over the past three years, returning 151.65% compared to the Sensex's 49.96%.