Valuation Metrics and Recent Changes
As of 13 February 2026, Vikram Thermo’s P/E ratio stands at 14.24, a figure that, while still elevated, marks a decline from previous levels that had positioned the stock in the very expensive category. The price-to-book value ratio is currently 3.53, reinforcing the expensive valuation status but indicating a slight easing compared to prior assessments. These metrics are critical for investors seeking to gauge whether the stock’s current price fairly reflects its earnings potential and asset base.
Other valuation multiples provide additional context: the enterprise value to EBIT ratio is 10.40, and the EV to EBITDA ratio is 9.79, both suggesting a premium valuation but less stretched than some peers. The EV to capital employed and EV to sales ratios, at 3.70 and 3.83 respectively, further underline the company’s relatively high valuation within the commodity chemicals sector.
Comparative Peer Analysis
When compared with its industry peers, Vikram Thermo’s valuation appears more reasonable. For instance, Stallion India and Sanstar Chemicals trade at significantly higher P/E ratios of 62.26 and 81.81 respectively, with corresponding EV/EBITDA multiples of 40.46 and 81.39. Platinum Industries and Jyoti Resins also maintain expensive valuations, with P/E ratios of 29.75 and 16.27. In contrast, companies like TGV Sraac and Gulshan Polyols are categorised as very attractive, trading at P/E ratios of 7.61 and 23.72, and EV/EBITDA multiples of 3.56 and 10.79 respectively.
This peer comparison highlights that while Vikram Thermo remains expensive, it is not as overvalued as some of its competitors, suggesting a relative value proposition for investors willing to accept a premium for quality and growth prospects.
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Financial Performance and Quality Metrics
Vikram Thermo’s return on capital employed (ROCE) is a robust 34.32%, while return on equity (ROE) stands at 24.80%, both indicators of strong operational efficiency and profitability. These figures support the company’s premium valuation, as they reflect effective capital utilisation and shareholder returns.
The dividend yield is modest at 0.65%, which may be less attractive for income-focused investors but is consistent with a growth-oriented profile. The PEG ratio is reported as 0.00, which typically indicates either a lack of earnings growth data or a very low growth expectation; this metric warrants closer scrutiny for investors prioritising growth valuation.
Price Movement and Market Capitalisation
On 13 February 2026, Vikram Thermo’s stock closed at ₹154.60, down 3.80% from the previous close of ₹160.70. The day’s trading range was between ₹149.70 and ₹162.90, with the 52-week high at ₹206.00 and low at ₹126.85. This price action reflects some near-term volatility, possibly influenced by the recent valuation grade downgrade from Hold to Sell on 12 January 2026, as per MarketsMOJO’s assessment.
The company’s market capitalisation grade is rated 4, indicating a mid-sized market cap within its sector. This size provides a balance between liquidity and growth potential, though it may also expose the stock to sharper price swings compared to larger-cap peers.
Returns Relative to Sensex Benchmark
Over the past year, Vikram Thermo has underperformed the Sensex, delivering a negative return of -22.85% compared to the benchmark’s positive 9.85%. However, the longer-term performance is impressive, with a three-year return of 131.26% and a five-year return of 360.94%, significantly outpacing the Sensex’s 37.89% and 62.34% respectively. Over a decade, the stock has delivered a staggering 1088.32% return versus the Sensex’s 264.02%, underscoring its strong growth trajectory despite recent setbacks.
Valuation Grade Downgrade and Market Implications
The downgrade in valuation grade from very expensive to expensive signals a recalibration of investor expectations. While the stock remains priced at a premium, the moderation in multiples suggests that the market is beginning to factor in potential risks or slower growth ahead. This shift may prompt cautious investors to reassess their positions, especially given the stock’s recent price decline and relative underperformance versus the broader market.
Investors should weigh the company’s strong profitability and historical outperformance against the current valuation and sector dynamics. The commodity chemicals sector is subject to cyclical pressures and raw material cost fluctuations, which could impact earnings visibility and valuation stability.
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Investor Takeaway
Vikram Thermo’s valuation adjustment from very expensive to expensive reflects a nuanced shift in market sentiment. While the stock still commands a premium relative to earnings and book value, the moderation in multiples may offer a more balanced entry point for investors who prioritise quality and long-term growth. The company’s strong ROCE and ROE metrics reinforce its operational strength, though the modest dividend yield and recent price weakness suggest a cautious approach.
Comparisons with peers reveal that Vikram Thermo is more attractively valued than several industry heavyweights, yet less so than some smaller or more cyclical players. This positioning may appeal to investors seeking a blend of growth and relative valuation discipline within the commodity chemicals sector.
Given the stock’s recent downgrade to a Sell rating by MarketsMOJO, investors should closely monitor upcoming earnings reports and sector developments to reassess the company’s growth outlook and valuation sustainability. The stock’s long-term track record of outperformance versus the Sensex remains a compelling factor, but near-term risks and valuation pressures cannot be ignored.
In summary, Vikram Thermo (India) Ltd’s valuation shift signals a subtle improvement in price attractiveness, though it remains a premium-priced stock within a volatile sector. Investors are advised to balance the company’s strong fundamentals against the evolving market context and consider peer alternatives where appropriate.
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