Asian Star Company Ltd Valuation Shifts Signal Renewed Price Attractiveness

Valuation Metrics Signal Improved Price Attractiveness

Asian Star Company Ltd currently trades at a P/E ratio of 28.28, which, while elevated compared to some peers, represents a shift from previous fair valuations to an attractive valuation grade as per recent assessments. The price-to-book value ratio stands at a notably low 0.64, signalling that the stock is trading below its book value, a factor that often appeals to value investors seeking bargains in the gems and jewellery space.

Other valuation multiples include an EV to EBIT of 21.78 and EV to EBITDA of 18.63, which are higher than some competitors but reflect the company’s operational scale and capital structure. The EV to capital employed ratio is 0.67, and EV to sales is 0.39, both indicating relatively modest enterprise value compared to sales and capital base.

Dividend yield remains subdued at 0.23%, consistent with the company’s modest return on capital employed (ROCE) of 3.64% and return on equity (ROE) of 2.40%, which are below sector averages. These profitability metrics suggest that while valuation is attractive, operational efficiency and profitability remain areas for improvement.

Comparative Peer Analysis Highlights Relative Valuation

When benchmarked against peers in the Gems, Jewellery and Watches industry, Asian Star’s valuation stands out as attractive but not the most compelling. For instance, Renaissance Global and TBZ Jewellery are rated as very attractive with P/E ratios of 12.45 and 7.09 respectively, and EV to EBITDA multiples below 10, indicating cheaper valuations relative to earnings.

Conversely, companies like Khazanchi Jewell and PNGS Gargi FJ are classified as expensive, with P/E ratios of 25.04 and 31.00 respectively, and higher EV to EBITDA multiples, suggesting that Asian Star’s current valuation is competitive within its peer group.

Notably, the PEG ratio for Asian Star is 0.00, which may indicate a lack of meaningful earnings growth expectations or data anomalies, whereas peers such as Khazanchi Jewell and Radhika Jeweltec have PEG ratios of 0.39 and 0.29 respectively, reflecting moderate growth prospects priced in by the market.

Stock Price Movement and Market Returns

Asian Star’s stock price closed at ₹642.00 on 23 Feb 2026, down 1.68% from the previous close of ₹653.00. The stock’s 52-week high and low stand at ₹870.00 and ₹533.10 respectively, indicating a wide trading range over the past year. The intraday range on the news date was ₹605.05 to ₹642.00, reflecting some volatility.

Examining returns relative to the Sensex reveals a mixed performance. Over the past week, Asian Star declined by 5.27%, while the Sensex gained 0.23%. Over one month, however, the stock outperformed with a 7.04% gain versus the Sensex’s 0.77%. Year-to-date, the stock is down 4.13%, slightly worse than the Sensex’s 2.82% decline. Longer-term returns are less favourable, with a 1-year loss of 13.13% against a Sensex gain of 9.35%, and a 5-year loss of 23.11% compared to the Sensex’s robust 62.73% appreciation.

Investment Quality and Market Sentiment

Asian Star’s Mojo Score currently stands at 34.0, with a Mojo Grade of Sell, upgraded from a previous Strong Sell rating on 11 Feb 2026. This upgrade reflects some improvement in valuation attractiveness and possibly operational metrics, but the overall sentiment remains cautious. The company’s market capitalisation grade is 4, indicating a mid-sized market cap within its sector.

Despite the valuation improvement, the relatively low ROCE and ROE, combined with subdued dividend yield, suggest that the company faces challenges in generating strong returns for shareholders. The sector’s competitive landscape, with several peers rated as very attractive or expensive, further complicates the investment case.

Broader Sector and Market Context

The Gems, Jewellery and Watches sector has experienced varied investor interest, influenced by global demand trends, commodity prices, and consumer sentiment. Asian Star’s valuation shift to attractive levels may be partly driven by broader market corrections and sector rotation, offering a potential entry point for value-focused investors.

However, investors should weigh the company’s operational performance and growth prospects carefully against peers with stronger fundamentals and lower valuations. The presence of very attractive peers such as TBZ and Renaissance Global, with significantly lower P/E and EV/EBITDA multiples, highlights the importance of selective stock picking within the sector.

Conclusion: Valuation Appeal Balanced by Operational Challenges

Asian Star Company Ltd’s recent shift in valuation parameters to more attractive levels offers a compelling narrative for value investors in the Gems, Jewellery and Watches sector. The low price-to-book value and moderate P/E ratio relative to peers suggest the stock is reasonably priced, especially given the company’s market cap and sector positioning.

Nonetheless, the company’s modest profitability metrics and underperformance relative to the Sensex over multiple time horizons temper enthusiasm. Investors should consider the broader competitive landscape and weigh Asian Star’s valuation appeal against peers with stronger operational metrics and growth prospects.

For those seeking exposure to the sector, Asian Star may represent a turnaround candidate or a value play, but it requires careful monitoring of earnings growth and return ratios to confirm sustained improvement.

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