Is Tata Chemicals overvalued or undervalued?

As of 28 October 2025, Tata Chemicals' valuation grade has moved from very attractive to attractive, indicating a shift in market perception. The company is currently assessed as overvalued based on its high PE ratio of 51.84 and an EV to EBITDA ratio of 14.14, which are significantly elevated compared to its peers. For instance, Kirloskar Industries, considered very attractive, has a PE of 26.29, while Adani Enterprises, deemed expensive, has a PE of 84.54.
With a Price to Book Value of 1.07 and a ROE of only 1.54%, Tata Chemicals appears to be trading at a premium relative to its financial performance. The PEG ratio remains at 0.00, suggesting no growth expectations are priced in, which further complicates the valuation narrative. Despite a strong historical return of 180.50% over the past five years, the recent performance has lagged behind the Sensex, with a year-to-date decline of 13.91% compared to the Sensex's gain of 8.30%. Overall, Tata Chemicals is currently overvalued in the context of its financial metrics and peer comparisons.