Is S A Tech Soft. overvalued or undervalued?

As of 29 August 2025, S A Tech Soft. has moved from expensive to very expensive in its valuation grade. The company is currently overvalued, with a PE ratio of 10.18, a Price to Book Value of 6.48, and an EV to EBITDA of 7.30. In comparison to its peers, TCS has a significantly higher PE ratio of 22.65 and EV to EBITDA of 15.96, while Infosys shows a PE ratio of 22.39 and EV to EBITDA of 14.69, indicating that S A Tech Soft. is trading at a substantial premium relative to these established companies.
The company's financial metrics reflect strong performance, with a ROCE of 43.57% and ROE of 63.59%, yet these figures do not justify its current valuation given the market context. Additionally, S A Tech Soft. has underperformed the Sensex significantly, with a year-to-date return of -56.2% compared to the Sensex's 3.31%. This underperformance further reinforces the conclusion that the stock is overvalued in the current market environment.