Is Sobha overvalued or undervalued?

As of 10 July 2025, Sobha's valuation grade has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently assessed as overvalued, with a PE ratio of 171.44, a Price to Book Value of 3.56, and an EV to EBITDA of 53.04. These ratios suggest that Sobha is trading at a premium compared to its earnings and book value.
In comparison with peers, DLF has a PE ratio of 43.98 and an EV to EBITDA of 97.13, while Macrotech Development shows a PE of 51 and an EV to EBITDA of 36.5. Sobha's high valuation metrics, particularly its PE ratio, highlight its overvaluation relative to these competitors. Additionally, the company's recent stock performance has been underwhelming, with a 1-year return of -25.03%, contrasting sharply with the Sensex's 4.09% return, further reinforcing the notion that Sobha is overvalued in the current market environment.