Is Riddhi Steel overvalued or undervalued?

As of 22 August 2025, Riddhi Steel's valuation grade has moved from very expensive to expensive. The company is currently assessed as overvalued. Key ratios include a PE Ratio of 9.49, an EV to EBITDA of 8.77, and a Price to Book Value of 1.26, which suggest that while the company is generating returns, its valuation remains high relative to its earnings and book value.
In comparison to peers, Riddhi Steel's PE Ratio is significantly lower than that of JSW Steel, which stands at 50.31, and Tata Steel, which is at 40.78, indicating that Riddhi Steel is trading at a discount relative to these competitors. However, it is important to note that the overall market sentiment has not favored Riddhi Steel, as evidenced by its year-to-date return of -31.97%, contrasting with a positive return of 4.05% for the Sensex. This further reinforces the view that Riddhi Steel is overvalued in the current market context.