Is Shivam Chemicals overvalued or undervalued?

As of 28 August 2025, Shivam Chemicals has moved from a fair valuation to a very expensive rating. The company appears to be overvalued based on its high valuation metrics, including a PE ratio of 39.66, an EV to EBITDA of 28.28, and a Price to Book Value of 6.43. These figures indicate that the stock is trading at a premium compared to its earnings and book value, suggesting a lack of sufficient growth prospects to justify such high valuations.
In comparison to its peers, Shivam Chemicals' PE ratio is significantly lower than Solar Industries, which has a PE of 99.06, but higher than Godrej Industries at 41.86. Additionally, the EV to EBITDA ratio of 28.28 is also higher than that of Deepak Nitrite, which stands at 25.73. Given these comparisons and the overall high valuation grade, Shivam Chemicals is considered overvalued. Notably, the company's stock has outperformed the Sensex year-to-date, with a return of 17.67% compared to the Sensex's 2.48%, but this does not mitigate the concerns regarding its current valuation.