Is Tata Chemicals overvalued or undervalued?

As of 10 January 2025, Tata Chemicals has moved from an attractive to a very attractive valuation grade. The company appears to be undervalued, especially when considering its current PE ratio of 71.97, an EV to EBITDA of 15.14, and a dividend yield of 1.60%. In comparison, peers such as Adani Enterprises and SRF are rated as expensive and very expensive, respectively, with PE ratios of 70.92 and 73.81, indicating that Tata Chemicals may offer better value relative to its competitors.
Despite a recent decline in stock performance compared to the Sensex, where Tata Chemicals has shown a year-to-date return of -9.17% against the Sensex's 5.63%, the company's strong valuation metrics suggest it is positioned favorably within the commodity chemicals industry. Overall, Tata Chemicals presents an attractive investment opportunity given its valuation relative to peers and its financial ratios.