Is Sunflag Iron overvalued or undervalued?

As of 26 June 2025, Sunflag Iron's valuation grade has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently considered overvalued. Key ratios reveal a PE ratio of 33.65, an EV to EBITDA of 15.21, and a ROCE of only 3.09%, which are concerning indicators of its financial health relative to its valuation.
In comparison with peers, Sunflag Iron's PE ratio is notably higher than that of Jindal Steel, which stands at 24.1, and Tata Steel at 52.91, both classified as fair. Additionally, while JSW Steel has a PE ratio of 66.7, it is important to note that it is also categorized as fair, suggesting that Sunflag Iron's valuation may not be justified given its lower return metrics. The company's recent stock performance has outpaced the Sensex, with a 1-year return of 41.16% compared to the Sensex's 6.46%, but this does not mitigate the overvaluation concern.