Is ReNew Energy Global Plc overvalued or undervalued?

As of 31 October 2025, the valuation grade for ReNew Energy Global Plc has moved from very attractive to attractive, indicating a shift in perceived value. The company appears to be overvalued, particularly when considering its P/E ratio of 174, which significantly exceeds the peer average of 29.85, as well as its EV to EBITDA ratio of 13.46 compared to peers like Brookfield Renewable Corp. at 7.79. Additionally, the Price to Book Value stands at 2.20, suggesting that the market is pricing the company at a premium relative to its book value.
In comparison to its peers, ReNew Energy Global Plc's return on equity (ROE) of 1.26% and return on capital employed (ROCE) of 6.01% are notably low, especially when contrasted with the higher valuations of competitors like Atlantica Sustainable Infrastructure Plc, which has a much higher P/E ratio of 1806.40. Over the past year, ReNew Energy has outperformed the S&P 500 with a return of 38.31% compared to 19.89%, but its longer-term performance over three years shows a stark underperformance with a return of 26.64% versus the S&P's 76.66%. This suggests that while the stock has had a strong recent performance, its valuation metrics indicate it may be overvalued in the current market context.