Is Sacheta Metals overvalued or undervalued?

As of 17 January 2025, Sacheta Metals has moved from a very attractive to an attractive valuation grade. The company is currently considered overvalued based on its financial ratios and peer comparisons. Key ratios include a PE ratio of 27.98, an EV to EBITDA of 12.60, and a PEG ratio of 3.74, which indicate a premium valuation relative to its earnings growth prospects.
In comparison with peers, Hindalco Industries, rated very attractive, has a significantly lower PE ratio of 8.8 and an EV to EBITDA of 5.93, while National Aluminium, also attractive, shows a PE of 6.57 and an EV to EBITDA of 4.05. These comparisons highlight that Sacheta Metals is trading at a higher valuation than its peers, suggesting it may not be justified given its lower return metrics, such as a ROCE of 5.95% and ROE of 4.06%. Additionally, while the stock has outperformed the Sensex in the short term, its year-to-date performance shows a decline of 17.08%, reinforcing the notion of overvaluation.