Is Riddhi Steel overvalued or undervalued?

As of 26 August 2025, Riddhi Steel's valuation grade has moved from expensive to fair, indicating a more favorable assessment of its market position. The company is currently fairly valued based on its financial metrics. Key ratios include a PE Ratio of 9.96, an EV to EBITDA of 8.93, and a PEG Ratio of 0.17, which suggest that the stock is reasonably priced relative to its earnings growth potential.
In comparison to its peers, Riddhi Steel's PE Ratio is significantly lower than that of JSW Steel, which stands at 50.26, and Tata Steel, which is at 39.87, both of which are considered attractive. This positions Riddhi Steel as a more appealing investment within the sector, especially given its solid ROE of 13.26% and ROCE of 10.65%. While the stock has underperformed the Sensex year-to-date, it has shown strong returns over longer periods, with a remarkable 598.93% increase over the past five years, reinforcing its potential value proposition in the iron and steel industry.