Is Virtual Galaxy overvalued or undervalued?

As of 16 September 2025, the valuation grade for Virtual Galaxy has moved from risky to very expensive. This indicates a significant shift in the perception of its valuation, suggesting that the company is currently overvalued. The key ratios reflect this sentiment, with a PE ratio of 14.25, an EV to EBITDA of 8.95, and a Price to Book Value of 4.91, which are not competitive compared to its peers.
In comparison, TCS and Infosys have PE ratios of 23.1 and 23.06, respectively, indicating that Virtual Galaxy is trading at a lower valuation multiple despite its higher ROCE of 36.52% and ROE of 34.47%. This disparity suggests that the market may not be fully recognizing the company's profitability relative to its peers. Additionally, while Virtual Galaxy's stock has underperformed against the Sensex over the past week, it has shown some resilience with a 3.98% return over the past month. Overall, the analysis concludes that Virtual Galaxy is overvalued in the current market environment.