Is Vishal Mega Mart overvalued or undervalued?

As of 1 February 2025, the valuation grade for Vishal Mega Mart has moved from does not qualify to very expensive. The company is currently overvalued, as indicated by a PE ratio of 93.01, a Price to Book Value of 9.18, and an EV to EBITDA of 38.99. These ratios significantly exceed those of its peers, such as Avenue Supermarts Ltd. with a PE ratio of 100.87 and Trent Ltd. at 132.74, both of which are also classified as very expensive.
The valuation metrics suggest that Vishal Mega Mart is not only overpriced compared to its industry but also lacks a competitive edge in terms of profitability, reflected in its ROCE of 12.91% and ROE of 9.87%. Recent stock performance shows that Vishal Mega Mart has outperformed the Sensex with a year-to-date return of 22.15% compared to the Sensex's 5.54%, yet this does not justify its high valuation.