Is Swaraj Engines overvalued or undervalued?

As of 10 October 2025, Swaraj Engines has moved from a fair valuation to an expensive one. The company is currently considered overvalued based on its financial ratios. The PE ratio stands at 29.85, the Price to Book Value is 12.30, and the EV to EBITDA ratio is 21.02, all indicating a premium valuation compared to its peers.
In comparison, Cummins India is deemed very expensive with a PE ratio of 51.48, while Kirloskar Oil is attractive with a PE of 28.91, suggesting that Swaraj Engines is relatively better positioned among its peers despite its high valuation. The company has shown strong performance with a ROE of 41.21% and a ROCE of 91.46%, but these metrics do not justify the current price level. Notably, Swaraj Engines has outperformed the Sensex significantly over the past year with a return of 42.25% compared to the Sensex's 1.09%, reinforcing the notion of its overvaluation.