Is Torrent Power overvalued or undervalued?

As of 8 August 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, with a PE ratio of 24.38, an EV to EBITDA of 15.12, and a ROE of 16.97%. In comparison, NTPC, which is rated attractive, has a significantly lower PE ratio of 13.57, while Tata Power Co., also rated attractive, presents a higher PE ratio of 29.31.
Despite the fair valuation, Torrent Power's recent stock performance has been mixed, with a year-to-date return of -10.15%, contrasting with the Sensex's gain of 2.20% during the same period. The company’s PEG ratio of 1.68 suggests that its growth prospects are reasonably priced compared to its earnings growth, reinforcing the conclusion that Torrent Power is currently fairly valued in the context of its peers.