Is Richa Info overvalued or undervalued?

As of 5 May 2025, the valuation grade for Richa Info has moved from risky to does not qualify, indicating a significant shift in its perceived investment quality. The company appears to be undervalued, particularly when considering its low PE ratio of 3.76, EV to EBIT of 3.44, and an impressive ROE of 44.23%. These ratios suggest that the company is generating substantial returns relative to its equity, despite its valuation grade.
When compared to peers, Richa Info's metrics stand in stark contrast to those of Tata Consultancy Services, which has a PE ratio of 25.23, and Infosys, with a PE of 24.32. This disparity highlights Richa Info's potential undervaluation within the software and consulting industry. Additionally, while the company's stock has underperformed the Sensex over the past month, it has outperformed on a year-to-date basis, suggesting a potential for recovery. Overall, Richa Info's current valuation presents an intriguing opportunity for investors.