Is Tata Technolog. overvalued or undervalued?

As of 20 October 2025, the valuation grade for Tata Technologies has moved from very expensive to expensive, indicating a slight improvement in perceived value. However, the company remains overvalued based on its current financial metrics. The PE ratio stands at 39.87, significantly higher than its peers like TCS at 21.68 and Infosys at 21.59, which suggests that Tata Technologies is trading at a premium compared to these competitors. Additionally, the EV to EBITDA ratio is 30.11, again above the industry average, reinforcing the notion of overvaluation.
In terms of key ratios, Tata Technologies has a Price to Book Value of 7.72 and a PEG ratio of 0.00, which further complicates its valuation narrative. While the company boasts a strong ROCE of 35.31% and ROE of 18.91%, these returns do not sufficiently justify the high valuation multiples it commands. Given the recent performance, with a year-to-date decline of 23.71% compared to a 7.97% rise in the Sensex, the stock appears to be overvalued in the current market context.