Is Rathi Steel overvalued or undervalued?

As of 25 June 2025, Rathi Steel's valuation grade has moved from very attractive to attractive, indicating a shift in market perception. The company is currently assessed as undervalued, with a PE ratio of 29.73, an EV to EBIT of 24.99, and an EV to EBITDA of 14.14. In comparison to its peers, Jindal Steel has a PE ratio of 23.26 and an EV to EBITDA of 11.22, while Tata Steel shows a PE of 51.56 and an EV to EBITDA of 10.99, highlighting that Rathi Steel's valuation remains more favorable relative to these competitors.
Despite a recent uptick in stock price, Rathi Steel has underperformed against the Sensex over the past year, with a return of -36.55% compared to the Sensex's 6.02%. This suggests that while the stock may be undervalued, the market has yet to fully recognize its potential, particularly in light of its attractive valuation metrics compared to peers.