Is Vertexplus Tech. overvalued or undervalued?

As of 9 June 2025, Vertexplus Tech. has moved from a grade of does not qualify to risky, indicating a significant change in its valuation outlook. The company appears to be overvalued, given its high PE ratio of 55.89, an EV to EBITDA of 30.61, and a PEG ratio of 2.87, which are substantially higher than its peers. For comparison, TCS and Infosys, which are considered attractive and fair respectively, have PE ratios of 25.51 and 24.46, highlighting the disparity in valuation metrics.
In addition to the elevated ratios, Vertexplus Tech. has a low ROCE of 5.78% and an even lower ROE of 3.63%, suggesting inefficiencies in generating returns relative to its equity. The company's stock has underperformed the Sensex over the past year, with a return of -16.24% compared to the Sensex's 7.78%, further reinforcing the notion that it is overvalued in the current market context.