Is VTM overvalued or undervalued?

As of 1 July 2025, the valuation grade for VTM has moved from expensive to very expensive, indicating a significant increase in perceived valuation. The company is currently considered overvalued based on its key financial ratios. The PE ratio stands at 22.56, while the EV to EBITDA ratio is 15.54, and the PEG ratio is notably low at 0.15, suggesting that despite the high price, growth expectations are not being met.
In comparison to its peers, VTM's valuation appears excessive. K P R Mill Ltd has a PE ratio of 46.46, while Trident is rated fair with a PE of 42.97, highlighting that VTM is priced higher than some of its competitors despite lower growth prospects. Additionally, VTM's recent stock performance has significantly outpaced the Sensex, with a one-year return of 268.75% compared to the Sensex's 5.31%, further complicating the valuation narrative. Overall, VTM is overvalued in the current market context.