Is Vivid Mercantile overvalued or undervalued?

As of 13 October 2025, the valuation grade for Vivid Mercantile has moved from risky to very expensive. The company is currently overvalued based on its financial ratios and peer comparisons. The price-to-earnings (PE) ratio stands at 20.93, while the price-to-book value is remarkably low at 0.11, indicating a significant discrepancy between market price and book value. Additionally, the EV to EBITDA ratio is at -118.25, which raises concerns about the company's earnings potential.
In comparison to its peers, Vivid Mercantile's PE ratio is substantially lower than that of DLF at 38.37 and Lodha Developers at 38.86, both of which are also classified as very expensive. The company's negative capital employed further complicates its valuation, as evidenced by its ROE of only 0.51%. Despite a recent one-week stock return of 4.22% compared to the Sensex's 0.66%, the overall performance over the longer term shows Vivid Mercantile lagging behind the index.