Is Ujaas Energy overvalued or undervalued?

As of 23 January 2025, the valuation grade for Ujaas Energy has moved from risky to very expensive, indicating a significant shift in its market perception. The company is currently considered overvalued, with a PE ratio of 445.10, a Price to Book Value of 48.48, and an EV to EBITDA ratio of 891.63. These ratios suggest that the stock is trading at a premium compared to its earnings and book value, which raises concerns about its sustainability at these levels.
In comparison to its peers, Ujaas Energy's PE ratio is substantially higher than that of NTPC Green at 187.3 and Suzlon Energy at 43.7, both of which are also classified as very expensive. The EV to EBITDA ratio of Ujaas Energy at 891.63 starkly contrasts with Suzlon Energy's 48.29, further underscoring the overvaluation. Additionally, the company's recent stock performance has significantly outpaced the Sensex, with a 1-year return of 292.21% compared to the Sensex's 7.61%, which may have contributed to the inflated valuation.