Is Sharda Motor overvalued or undervalued?

As of 29 August 2025, Sharda Motor's valuation grade has moved from fair to attractive, indicating a positive shift in its market perception. The company is currently considered undervalued based on its financial metrics, with a PE ratio of 18.22, an EV to EBITDA of 12.50, and a ROE of 29.66%. In comparison to its peers, Sharda Motor's valuation stands out favorably against Bosch, which has a significantly higher PE ratio of 53.09, and Uno Minda, with a PE of 71.64.
Moreover, while Sharda Motor's PEG ratio is 5.27, peers like Samvardhan Motherson are also attractive with a PE of 28.68, highlighting that Sharda Motor offers a competitive valuation within the auto components sector. Despite recent underperformance against the Sensex over the past year, where it declined by 26.13% compared to the Sensex's 2.83%, its strong historical returns over three and five years suggest a robust growth potential that may not be fully reflected in its current price.