Is Tarmat overvalued or undervalued?

As of 31 October 2025, Tarmat's valuation grade has moved from expensive to fair, indicating a shift in its market perception. The company is currently fairly valued, with a PE ratio of 64.21, an EV to EBITDA of 43.50, and a Price to Book Value of 0.82. In comparison, its peers such as Larsen & Toubro, which is rated attractive, has a significantly lower PE ratio of 34.58 and an EV to EBITDA of 18.56, highlighting Tarmat's relatively high valuation metrics.
Despite the fair valuation, Tarmat has underperformed against the Sensex, with a year-to-date return of -33.33% compared to the Sensex's 7.42%. This underperformance, coupled with a low ROCE of 0.92% and ROE of 1.19%, suggests that while the company is not overvalued, it may face challenges in delivering strong returns relative to its peers and the broader market.