Is Torrent Power overvalued or undervalued?

As of 8 July 2025, Torrent Power's valuation grade has moved from expensive to fair, indicating a more favorable assessment of its market position. The company is currently fairly valued. Key ratios include a PE Ratio of 24.01, an EV to EBITDA of 14.95, and a PEG Ratio of 0.43, which suggests that the stock may be undervalued relative to its growth prospects.
In comparison to its peers, Torrent Power's PE Ratio is higher than NTPC, which has a PE of 14.21 and is rated very attractive, but lower than Tata Power Co., which has a PE of 31.68 and is rated attractive. This positioning, along with a ROE of 16.97% and a ROCE of 15.12%, supports the conclusion that Torrent Power is fairly valued within its industry context. Notably, while the stock has underperformed the Sensex over the past year, its long-term returns over 3, 5, and 10 years significantly outpace the index, highlighting its potential for future growth.