Is Surana Solar overvalued or undervalued?

As of 5 May 2025, Surana Solar's valuation grade has moved from very expensive to risky, indicating a significant shift in its market perception. The company appears to be overvalued based on its current metrics, with a PE ratio of 178.72, an EV to EBITDA ratio of 171.86, and a Price to Book Value of 3.18. These ratios suggest that investors are paying a premium for the company's earnings and assets, which may not be justified given its negative ROCE of -1.99% and a low ROE of 0.12%.
When compared to peers in the heavy electrical equipment industry, Surana Solar's valuation stands out unfavorably. For instance, while Surana Solar has a PE ratio of 178.72, other companies in the sector may have significantly lower ratios, indicating that they are potentially more attractive investments. Additionally, despite a recent 1-month stock return of 16.74%, which outperformed the Sensex's 3.86%, the year-to-date performance shows a decline of 19.63%, further reinforcing the notion that Surana Solar is overvalued in its current state.