Valuation Metrics Indicate a Premium Pricing
Kennametal India currently trades at a price-to-earnings (PE) ratio of 43.8, which is significantly higher than the broader market average and many of its industrial manufacturing peers. The price-to-book (P/B) ratio stands at 6.41, signalling that investors are paying a substantial premium over the company’s net asset value. Additionally, the enterprise value to EBITDA (EV/EBITDA) ratio is 25.35, reflecting elevated expectations for earnings before interest, taxes, depreciation, and amortisation.
These valuation multiples suggest that the market has priced in strong growth prospects and robust profitability. However, the price-to-earnings-to-growth (PEG) ratio, which adjusts the PE ratio for earnings growth, is also notably...
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