Is Solar Industries overvalued or undervalued?

As of 21 August 2020, Solar Industries' valuation grade has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently considered overvalued, supported by a PE ratio of 123.77, a Price to Book Value of 34.13, and an EV to EBITDA ratio of 76.22. These ratios highlight a premium valuation compared to its peers.
In comparison, Godrej Industries, which is rated attractive, has a PE ratio of 46.63 and an EV to EBITDA of 34.36, demonstrating a stark contrast in valuation metrics. Other peers like Gujarat Fluoroch and Deepak Nitrite also show lower valuations, with PE ratios of 73.59 and 37.97, respectively. Notably, Solar Industries has outperformed the Sensex significantly over various periods, with a year-to-date return of 72.06% compared to the Sensex's 5.62%, reinforcing the narrative of its current overvaluation.