Is Sterlite Tech. overvalued or undervalued?

Sep 19 2025 08:03 AM IST
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As of September 18, 2025, Sterlite Tech. is considered overvalued with a PE ratio of -461.49, a Price to Book Value of 3.01, and an EV to EBITDA ratio of 14.65, indicating weak profitability and growth potential compared to peers, despite a strong year-to-date return of 43.35%.
As of 18 September 2025, the valuation grade for Sterlite Tech. has moved from fair to expensive. The company appears overvalued based on its current financial ratios. Notably, the PE ratio stands at an alarming -461.49, while the Price to Book Value is 3.01, and the EV to EBITDA ratio is 14.65. These figures suggest significant concerns regarding profitability and valuation.

In comparison to its peers, Sterlite Tech. has a much lower PEG ratio of 0.00, while Polycab India and Havells India have PEG ratios of 2.08 and 49.53, respectively, indicating that Sterlite is not only lagging behind in growth potential but is also priced unfavorably in relation to its earnings. Furthermore, Sterlite's ROCE is just 3.51%, and its ROE is -3.57%, which are considerably weaker than those of its competitors. Despite a strong year-to-date return of 43.35% compared to the Sensex's 6.24%, the underlying financial metrics suggest that Sterlite Tech. is overvalued at its current price of 122.75.
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