Is Riddhi Steel overvalued or undervalued?

As of 23 July 2025, Riddhi Steel's valuation grade has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently assessed as overvalued. Key ratios include a PE ratio of 9.83, an EV to EBITDA of 8.89, and a ROE of 13.26%.
In comparison to its peers, Riddhi Steel's PE ratio is notably lower than that of JSW Steel, which stands at 49.38, and Tata Steel at 53.67, both of which are classified as fairly valued. Despite Riddhi Steel's strong historical performance, including a 640.74% return over the past five years compared to the Sensex's 116.90%, the current valuation suggests that the stock may not be a prudent investment at this time.