Is Tata Steel overvalued or undervalued?

As of 6 June 2025, Tata Steel's valuation grade has moved from fair to attractive, indicating a positive shift in its market position. The company is currently considered undervalued. Key ratios include a PE ratio of 51.92, an EV to EBITDA of 11.04, and a PEG ratio of 1.34, which suggest that while the stock is priced at a premium, it may still offer growth potential relative to its earnings.
In comparison with peers, Tata Steel's PE ratio is lower than that of JSW Steel, which stands at 64.98, while Jindal Steel, also rated attractive, has a significantly lower PE of 24.29. This positions Tata Steel favorably within the industry, especially considering its attractive valuation against competitors. Notably, Tata Steel has outperformed the Sensex year-to-date with a return of 14.12% compared to the Sensex's 5.59%, reinforcing the notion that it may be a compelling investment opportunity.