Is Thejo Engg. overvalued or undervalued?

As of 20 May 2025, Thejo Engineering's valuation grade has moved from very expensive to expensive, indicating a slight improvement in its perceived value. The company is currently considered overvalued based on its high price-to-earnings (PE) ratio of 39.94, a price-to-book value of 6.69, and an EV to EBITDA ratio of 22.18, which are significantly higher than industry peers. For comparison, Ircon International, which is rated fairly valued, has a PE ratio of 28.25 and an EV to EBITDA of 23.27, while Shriram Pistons, also rated expensive, shows a PE of 21.73.
Despite a recent decline in stock performance, with a one-year return of -28.65% compared to the Sensex's 7.83%, Thejo Engineering's ratios suggest that it remains overpriced relative to its earnings and book value. Given these metrics and the peer comparison, Thejo Engineering is currently classified as overvalued.