Is Vertexplus Tech. overvalued or undervalued?

As of 10 June 2025, Vertexplus Tech. has moved from a grade of risky to does not qualify, indicating a significant deterioration in its valuation standing. The company is currently assessed as overvalued, with a PE ratio of 53.70, an EV to EBITDA ratio of 29.37, and a PEG ratio of 2.76, which are considerably higher than its peers. For comparison, TCS has a PE ratio of 25.81 and an EV to EBITDA of 18.05, while Infosys stands at a PE of 24.82 and an EV to EBITDA of 16.17, highlighting the premium Vertexplus Tech. commands despite its lower return on equity of 3.63% and return on capital employed of 5.78%.
The company's stock performance has also lagged behind the Sensex, with a one-year return of -20.16% compared to the Sensex's 7.93%, further supporting the conclusion that Vertexplus Tech. is overvalued in the current market environment. Given the high valuation ratios and poor relative performance, investors should exercise caution when considering this stock.