Is Reliance Power overvalued or undervalued?

Sep 03 2025 08:01 AM IST
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As of September 2, 2025, Reliance Power is considered overvalued with a valuation grade of fair, highlighted by a PE ratio of -3699.45 and a negative ROE of -0.91%, despite a strong 53.55% return over the past year.
As of 2 September 2025, the valuation grade for Reliance Power has moved from attractive to fair. The company is currently considered overvalued based on its financial ratios. Notably, it has a PE ratio of -3699.45, which is a significant outlier compared to its peers, along with an EV to EBITDA of 16.46 and a Price to Book Value of 1.17.

In comparison to its peers, NTPC is rated attractive with a PE ratio of 13.62 and an EV to EBITDA of 10.72, while Tata Power Co. also holds an attractive rating with a PE ratio of 29.84 and an EV to EBITDA of 12.11. Reliance Power's negative ROE of -0.91% further underscores its valuation challenges. Despite a strong return of 53.55% over the past year compared to a -2.91% return for the Sensex, the fundamental metrics suggest that Reliance Power is not positioned favorably in the current market.
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