Is Ambika Cotton overvalued or undervalued?

As of 16 June 2025, Ambika Cotton has moved from a fair to an attractive valuation grade, indicating a positive shift in its market perception. The company is currently considered undervalued, with a PE ratio of 13.55, a Price to Book Value of 0.99, and an EV to EBITDA of 7.11. These ratios suggest that the stock is trading at a reasonable price relative to its earnings and assets.
In comparison to its peers, Ambika Cotton's valuation metrics stand out favorably; for instance, K P R Mill Ltd is categorized as very expensive with a PE ratio of 45.76, while Trident, which is rated fair, has a PE ratio of 41.88. Additionally, the company's ROCE of 10.82% and ROE of 7.27% further reinforce its attractiveness. Despite recent underperformance compared to the Sensex over the past year, where the stock returned -4.61% against the Sensex's 6.24%, the overall valuation suggests that Ambika Cotton presents a compelling investment opportunity at its current price of 1556.15.