Is Thermax overvalued or undervalued?

As of 20 June 2025, Thermax's valuation grade has moved from very expensive to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued. Key ratios include a PE ratio of 64.21, an EV to EBITDA ratio of 43.77, and a Price to Book Value of 8.25, all of which are significantly higher than industry norms.
In comparison to its peers, Thermax's PE ratio is notably higher than BEML Ltd's 65.88 and Praj Industries' 45.75, suggesting that investors are paying a premium for Thermax relative to its earnings potential. Additionally, the company's recent performance has lagged behind the Sensex, with a year-to-date return of -16.03% compared to the Sensex's 5.46%. This further reinforces the view that Thermax is overvalued in the current market environment.