Is Sonata Software overvalued or undervalued?

As of 15 July 2025, Sonata Software has moved from a fair to an expensive valuation grade. The company is currently considered overvalued. Key ratios include a PE Ratio of 28.86, an EV to EBITDA of 17.51, and a ROE of 24.89%.
In comparison to its peers, TCS has a PE Ratio of 23.88 and EV to EBITDA of 16.86, while Infosys shows a PE Ratio of 24.65 and EV to EBITDA of 16.05. These comparisons highlight Sonata's higher valuation metrics relative to its peers. Additionally, while Sonata has experienced a 1-month return of 6.33%, which outperformed the Sensex's 1.79%, its year-to-date performance shows a decline of 27.29%, further supporting the view that the stock may be overvalued.