Is Swaraj Engines overvalued or undervalued?

As of 27 June 2025, Swaraj Engines has moved from an expensive to a fair valuation grade. The company is currently fairly valued, with a PE ratio of 30.12, an EV to EBITDA ratio of 21.14, and a PEG ratio of 1.48. These ratios indicate that while the company is not undervalued, it is also not overvalued compared to its peers.
In comparison to its industry peers, Cummins India is considered very expensive with a PE ratio of 46.52, while Kirloskar Oil is rated as attractive with a PE ratio of 27.13. The strong return on capital employed (ROCE) of 91.46% and return on equity (ROE) of 39.59% further support the fair valuation of Swaraj Engines. Notably, the company's year-to-date return of 39.08% significantly outperforms the Sensex return of 7.58%, reinforcing the positive outlook on its valuation.