Is Yug Decor overvalued or undervalued?

As of 25 June 2025, the valuation grade for Yug Decor has moved from risky to very expensive. The company is currently overvalued, indicated by a PE ratio of 35.60, an EV to EBITDA of 20.94, and a Price to Book Value of 4.44. Compared to its peers, Yug Decor's valuation appears significantly higher, especially when juxtaposed with Godrej Industries, which has a PE ratio of 42.83 and an EV to EBITDA of 32.59, and Aarti Industries, which is fairly valued with a PE of 51.89.
The company's financial metrics suggest a lack of strong profitability, with a ROCE of 9.69% and a ROE of only 0.87%. Furthermore, recent stock performance has been underwhelming, with a year-to-date return of -13.16%, contrasting sharply with the Sensex's positive return of 5.91% over the same period. This combination of high valuation ratios and poor relative performance reinforces the conclusion that Yug Decor is overvalued in the current market environment.