Is Transrail Light overvalued or undervalued?

As of 1 July 2025, the valuation grade for Transrail Light has moved from fair to expensive, indicating a shift in its market perception. The company is currently overvalued based on its key financial ratios, which include a PE ratio of 26.75, an EV to EBITDA of 13.83, and a Price to Book Value of 6.78. These ratios suggest that the stock is trading at a premium compared to its intrinsic value.
In comparison to peers, K E C Intl. has a PE ratio of 42.45 and an EV to EBITDA of 18.31, while Kalpataru Projects shows a PE of 35.11 and an EV to EBITDA of 12.52, both of which reflect more attractive valuations relative to Transrail Light. Additionally, despite the company's strong ROCE of 34.87% and ROE of 25.35%, the high valuation ratios indicate that investors may be overestimating future growth potential. Notably, Transrail Light has outperformed the Sensex with a year-to-date return of 22.51% compared to the Sensex's 7.11%, but this performance does not justify its current overvaluation.