Is Sunflag Iron overvalued or undervalued?

As of 20 August 2025, the valuation grade for Sunflag Iron has moved from expensive to very expensive. This indicates that the company is currently overvalued. The key ratios reveal a PE ratio of 28.42, an EV to EBITDA of 14.46, and a ROCE of only 3.09%, which are concerning when compared to industry peers. For instance, JSW Steel, which is rated fair, has a significantly higher PE ratio of 51.72, while Tata Steel, rated attractive, has a lower EV to EBITDA of 10.94.
In comparison to its peers, Sunflag Iron's valuation metrics suggest that it is not justified given its low return on equity of 1.85% and a PEG ratio of 0.81. Other peers like Jindal Steel and SAIL are rated fair and attractive, respectively, with much more favorable valuations and performance metrics. Although Sunflag Iron has outperformed the Sensex in the past year with a return of 41.56% compared to the Sensex's 1.31%, the current valuation indicates that it is overvalued in the context of its financial performance and peer comparisons.