Is Yogi Ltd overvalued or undervalued?

As of 9 May 2025, the valuation grade for Yogi Ltd has moved from risky to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a staggering PE ratio of 491.13, an EV to EBIT of 730.96, and an EV to EBITDA also at 730.96. These ratios are considerably higher than its peers, such as Life Insurance with a PE ratio of 12.54 and Bajaj Finance at 35.01, highlighting the disparity in valuation within the industry.
In comparison to its peers, Yogi Ltd's financial metrics suggest that it is not only overvalued but also lacks the performance indicators that would justify such a high valuation. The company's ROCE stands at a mere 0.05% and ROE at 1.29%, which are significantly lower than what would typically be expected in a healthy financial environment. While Yogi Ltd has outperformed the Sensex in various time frames, including a remarkable 215.91% year-to-date return, this performance does not compensate for its excessive valuation metrics.