Is Riddhi Steel overvalued or undervalued?

Aug 25 2025 08:07 AM IST
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As of August 22, 2025, Riddhi Steel is considered overvalued with a valuation grade of expensive, featuring a PE ratio of 9.49, an EV to EBITDA of 8.77, and a ROE of 13.26%, which is significantly lower than its peers like JSW Steel and Tata Steel, despite a strong 189.08% return over the past three years but underperformance relative to the Sensex year-to-date.
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 ROE of 13.26%.

In comparison to its peers, Riddhi Steel's PE ratio is significantly lower than that of JSW Steel, which stands at 50.31, and Tata Steel, which has a PE of 40.78. This suggests that Riddhi Steel may not be justifiably priced given its current earnings potential relative to the market. Additionally, while the stock has shown a strong return of 189.08% over the past three years, it has underperformed compared to the Sensex year-to-date, indicating potential concerns about its future growth trajectory.
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