Is Swaraj Engines overvalued or undervalued?

As of 16 October 2025, Swaraj Engines has moved from expensive to fair in its valuation grade. The company is currently fairly valued, with a PE ratio of 28.33, an EV to EBITDA of 19.98, and a PEG ratio of 1.44. In comparison to its peers, Cummins India is deemed very expensive with a PE of 51.24, while Kirloskar Oil is rated attractive with a PE of 28.64.
Swaraj Engines exhibits strong financial performance, highlighted by a remarkable ROCE of 91.46% and an ROE of 42.23%. Despite recent stock performance showing a decline of 1.25% over the past week compared to a 1.58% gain in the Sensex, the company has outperformed the index significantly over the longer term, with a YTD return of 39.56% against the Sensex's 6.82%. This suggests that while the stock has faced short-term volatility, its overall valuation remains justified in the current market context.