Is Swaraj Engines overvalued or undervalued?

As of 24 September 2025, Swaraj Engines has moved from expensive to fair in its valuation grade. The company is currently fairly valued, with a PE ratio of 29.57, an EV to EBITDA ratio of 20.81, and a PEG ratio of 1.27. Notably, its return on capital employed (ROCE) stands at an impressive 91.46%, and return on equity (ROE) is at 41.21%, indicating strong profitability metrics.
In comparison to peers, Cummins India is considered very expensive with a PE ratio of 51.90, while Kirloskar Oil is attractive with a PE of 31.57. This positions Swaraj Engines favorably within its industry of compressors, pumps, and diesel engines. Additionally, the company's stock has outperformed the Sensex significantly over the past three years, with a return of 147.97% compared to the Sensex's 40.65%, reinforcing the notion that it is fairly valued in the current market context.