Is Surya Roshni overvalued or undervalued?

As of 23 July 2025, the valuation grade for Surya Roshni has moved from fair to expensive, indicating that the company is currently overvalued. The key ratios reflect this assessment, with a PE ratio of 21.51, a Price to Book Value of 3.02, and an EV to EBITDA of 12.39. Compared to its peers, Surya Roshni's valuation appears high, especially when contrasted with JSW Steel and Tata Steel, which have PE ratios of 49.38 and 53.67, respectively, but are still considered fairly valued.
The company's financial performance shows a ROCE of 20.89% and a ROE of 14.06%, which are respectable figures; however, the elevated PEG ratio of 4.06 suggests that growth expectations may be overly optimistic relative to earnings. Additionally, Surya Roshni has outperformed the Sensex in recent periods, with a year-to-date return of 15.31% compared to the Sensex's 5.87%. This performance may not be sustainable given the current valuation metrics.