Is Tel-Instrument Electronics Corp. overvalued or undervalued?

Jun 25 2025 08:14 AM IST
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As of October 15, 2023, Tel-Instrument Electronics Corp. is considered overvalued due to its high P/E ratio of 25.4 compared to the industry average of 18.7, a P/B ratio of 3.1 versus a peer average of 2.5, and a lower ROE of 12% compared to competitors, alongside underperformance relative to the Sensex.
As of 15 October 2023, Tel-Instrument Electronics Corp. moved from fair to overvalued. The company's current price-to-earnings (P/E) ratio stands at 25.4, which is significantly higher than the industry average of 18.7, indicating a premium that may not be justified by its growth prospects. Additionally, the price-to-book (P/B) ratio is at 3.1, compared to a peer average of 2.5, further suggesting that the stock is trading at elevated levels relative to its tangible assets. The return on equity (ROE) is reported at 12%, which, while respectable, is lower than that of peers like Ametek Inc. at 16% and Honeywell International Inc. at 14%.

In summary, given the high valuation ratios and the comparison with industry peers, Tel-Instrument Electronics Corp. appears to be overvalued. The stock's performance has lagged behind the Sensex, reinforcing the notion that it may not be an attractive investment at current levels.
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