Is Tata Steel overvalued or undervalued?

As of 9 July 2025, Tata Steel's valuation grade has moved from fair to attractive, indicating a positive shift in its market perception. The company appears to be undervalued based on its current metrics. Key ratios include a PE Ratio of 52.41, an EV to EBITDA of 11.12, and a PEG Ratio of 1.35, which suggest that while the company has a high price-to-earnings ratio, it is still positioned favorably compared to its peers.
In comparison to its industry peers, Tata Steel's valuation stands out; for instance, JSW Steel has a PE Ratio of 67.32 and an EV to EBITDA of 14.59, while Jindal Steel, which is also attractive, has a significantly lower PE Ratio of 23.85. This indicates that Tata Steel is relatively more appealing in terms of valuation. Additionally, despite a recent dip in stock price, Tata Steel has outperformed the Sensex over the longer term, with a remarkable 361.67% return over the past five years, reinforcing its attractiveness as an investment opportunity.