Is Tata Steel overvalued or undervalued?

As of 14 July 2025, Tata Steel's valuation grade has moved from attractive to fair, indicating a shift in its perceived value. The company is currently fairly valued, with a PE ratio of 52.86, an EV to EBITDA of 11.18, and a ROCE of 8.56%. In comparison to peers, JSW Steel has a higher PE ratio of 67.22, while Jindal Steel is more attractive with a PE of 23.64.
Despite the recent downgrade in valuation, Tata Steel has shown strong performance over the long term, with a 5-year return of 376.10% compared to the Sensex's 128.27%. However, the current valuation metrics suggest that while Tata Steel is not overvalued, it may not present the same level of attractiveness as some of its peers, particularly those with lower PE ratios.