Is Swaraj Engines overvalued or undervalued?

As of 10 October 2025, Swaraj Engines' valuation grade has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued based on key financial ratios, including a PE ratio of 29.85, an EV to EBITDA of 21.02, and a Price to Book Value of 12.30. These figures suggest that the stock is trading at a premium compared to its earnings and asset value.
In comparison to its peers, Swaraj Engines' PE ratio is lower than Cummins India's significantly high PE of 51.48, but higher than Kirloskar Oil's attractive PE of 28.91. The PEG ratio of 1.28 further supports the notion of overvaluation, especially when juxtaposed with Kirloskar Oil, which has a PEG of 0.00. Despite recent strong performance, with a YTD return of 43.50% compared to the Sensex's 5.58%, the current valuation metrics indicate that Swaraj Engines is overvalued in its sector.