Is Riddhi Steel overvalued or undervalued?

As of 26 September 2025, Riddhi Steel's valuation grade has moved from expensive to very expensive. The company is currently overvalued based on its financial metrics. Key ratios include a price-to-earnings (PE) ratio of 9.28, an EV to EBITDA ratio of 8.79, and a return on equity (ROE) of 12.22%.
When compared to peers, Riddhi Steel's valuation stands out as very expensive, especially against JSW Steel, which has a PE ratio of 54, and Tata Steel, with a PE of 43.07. This stark contrast in valuation ratios indicates that Riddhi Steel is not only overvalued but also underperforming relative to its peers. Additionally, the company's recent stock performance has been disappointing, with a year-to-date return of -33.44% compared to a positive 2.93% return from the Sensex, further reinforcing the overvaluation narrative.