Is Voltas overvalued or undervalued?

As of 8 May 2025, the valuation grade for Voltas has moved from expensive to fair. Based on the analysis, the company appears to be fairly valued at this time. Key ratios include a PE ratio of 49.99, an EV to EBITDA ratio of 37.52, and a PEG ratio of 0.21, indicating a potential for growth relative to its price.
In comparison to peers, Voltas' valuation stands out against Blue Star, which has a higher PE ratio of 56.19, and Johnson Controls, which is considered expensive with a PE of 80.2. While Voltas has a lower ROE of 12.92% compared to the industry average, its ROCE of 16.66% suggests efficient capital use. Notably, Voltas has underperformed the Sensex over the past year with a return of -11.27% compared to the Sensex's 7.60%, which may reinforce the argument for its current valuation status.