Is Sterling & Wils. overvalued or undervalued?

As of 27 June 2025, the valuation grade for Sterling & Wilson has moved from fair to expensive, indicating a significant shift in its market perception. The company is currently considered overvalued, with a PE ratio of 91.39, a Price to Book Value of 7.39, and an EV to EBITDA ratio of 31.08. These ratios suggest that the stock is trading at a premium compared to its earnings and book value, which raises concerns about its sustainability at these levels.
In comparison to its peers, Sterling & Wilson's valuation stands out as particularly high; for instance, Rail Vikas has a PE of 64.31 and Tube Investments has a PE of 88.05, both of which are still lower than Sterling & Wilson's. Additionally, while the PEG ratio of 0.66 indicates potential growth, the overall high valuation metrics suggest that investors may be overestimating future growth prospects. The company's recent stock performance has also been underwhelming, with a year-to-date return of -30.61% compared to a 7.58% return from the Sensex, further reinforcing the notion that the stock is overvalued.