Is Riddhi Steel overvalued or undervalued?

As of 20 August 2025, the valuation grade for Riddhi Steel has moved from expensive to very expensive. This indicates a significant shift in perception regarding the company's valuation, suggesting it is currently overvalued. The company's PE ratio stands at 9.49, while its EV to EBITDA ratio is 8.77, and the PEG ratio is notably low at 0.16, which typically indicates strong growth potential relative to its price.
In comparison to its peers, Riddhi Steel's valuation appears excessive, particularly when contrasted with Tata Steel, which is rated as attractive with a PE ratio of 41.66, and JSW Steel, which is rated fair with a PE of 51.72. Given these comparisons and the company's current valuation metrics, Riddhi Steel is deemed overvalued. Additionally, while the stock has outperformed the Sensex over the past three years, it has underperformed in the year-to-date and one-year periods, reinforcing concerns about its current valuation.