Is Smiths & Founder overvalued or undervalued?

As of 24 October 2025, the valuation grade for Smiths & Founder has moved from expensive to very expensive. The company is currently overvalued, with a PE ratio of 42.30, an EV to EBITDA of 34.26, and a PEG ratio of 0.53. In comparison to its peers, Bharat Forge has a PE ratio of 59.95 and an EV to EBITDA of 24.96, while CIE Automotive, which is rated attractive, shows a significantly lower PE of 20.08 and an EV to EBITDA of 11.92.
The financial metrics indicate that Smiths & Founder is trading at a premium compared to its industry peers, suggesting limited upside potential. Additionally, while the company has seen strong returns over the past five years, its year-to-date performance is notably poor at -25.79%, contrasting sharply with the Sensex's 7.77% return. This further reinforces the view that the stock is overvalued in the current market environment.