Is Reliance Home overvalued or undervalued?

As of 28 August 2025, Reliance Home's valuation grade has moved from attractive to risky, indicating a significant deterioration in its financial standing. The company is currently overvalued, as evidenced by its troubling headline ratios, including a PE ratio of -68.91, an EV to EBITDA of -98.57, and a ROCE of -113.46%. These figures highlight severe operational challenges and negative profitability.
In comparison to its peers, Reliance Home's valuation metrics starkly contrast with those of HUDCO, which has a PE of 14.75 and an EV to EBITDA of 13.42, and LIC Housing Finance, boasting a PE of 5.48 and an EV to EBITDA of 11.14. The stark differences in these ratios underscore the risk associated with Reliance Home's current valuation. While the stock has outperformed the Sensex over the past year with a return of 28.72% compared to the Sensex's -2.08%, the underlying financial metrics suggest that the company's stock price does not reflect its true value, reinforcing the conclusion that it is overvalued.