Is United Heat overvalued or undervalued?

As of 5 September 2025, the valuation grade for United Heat has moved from very expensive to expensive, indicating a slight improvement in its perceived value. Despite this change, the company remains overvalued based on its financial ratios. The PE ratio stands at 25.39, while the EV to EBITDA ratio is 13.36, both of which are higher than many peers. For instance, Larsen & Toubro, considered fairly valued, has a PE ratio of 31.54 and an EV to EBITDA of 16.46, while IRB Infrastructure Development, also expensive, has a PE of 30.71 and an EV to EBITDA of 11.56.
Given these comparisons and the current valuation metrics, United Heat appears to be overvalued. The company's ROCE is 12.38% and ROE is 9.06%, which do not justify its high valuation ratios relative to its peers. Additionally, the stock has underperformed against the Sensex, with a year-to-date return of -21.78% compared to the Sensex's positive return of 4.64%. This further reinforces the conclusion that United Heat is not a compelling investment at its current price of 70.55.