Is Sobha overvalued or undervalued?

As of 29 August 2025, Sobha's valuation grade has moved from very expensive to expensive, indicating a slight improvement in its perceived value. The company is currently considered overvalued based on its high PE ratio of 151.43, an EV to EBIT ratio of 87.88, and a Price to Book Value of 3.40. These figures suggest that investors are paying a premium for Sobha compared to its earnings and asset value.
In comparison to its peers, Sobha's PE ratio significantly exceeds that of DLF at 38.29 and Lodha Developers at 40.42, both categorized as very expensive. Additionally, Sobha's EV to EBITDA ratio of 56.67 is higher than that of DLF's 81.41, indicating that while Sobha is expensive, it is not the most overvalued in the sector. Despite recent stock performance lagging behind the Sensex, with a year-to-date return of -7.69% compared to the Sensex's 2.14%, Sobha's long-term performance over three and five years shows substantial gains of 113.26% and 456.24%, respectively.