Is Thermax overvalued or undervalued?

As of 6 August 2025, Thermax's valuation grade has moved from very expensive to expensive, indicating a slight improvement in perceived value but still suggesting a high valuation. The company is currently considered overvalued. Key ratios include a PE ratio of 61.26, an EV to EBITDA of 40.44, and a PEG ratio of 5.66, all of which are significantly higher than many of its peers.
In comparison, BEML Ltd has a PE ratio of 56.19 and an EV to EBITDA of 32.95, while Action Construction Equipment shows a PE of 31.5 and an EV to EBITDA of 24.67, highlighting Thermax's premium valuation relative to these competitors. Additionally, the company's recent stock performance has underperformed the Sensex, with a year-to-date return of -15.17% compared to the Sensex's 3.08%, further reinforcing the notion that Thermax may be overvalued in the current market context.