Is Ambika Cotton overvalued or undervalued?

As of 11 July 2025, the valuation grade for Ambika Cotton has moved from attractive to fair. The company is currently fairly valued based on its financial metrics. The PE ratio stands at 14.06, the Price to Book Value is 1.02, and the EV to EBITDA ratio is 7.44.
In comparison to its peers, Ambika Cotton's valuation appears reasonable; for instance, K P R Mill Ltd is considered very expensive with a PE ratio of 50.25, while Trident is also rated fair with a PE of 43.63. Notably, Ambika Cotton's ROCE is 10.82%, and its ROE is 7.27%, indicating a solid performance relative to its valuation. Despite a recent stock return of 2.78% over the past week, the longer-term performance shows a decline of 4.49% over the past year, contrasting with a 3.26% gain in the Sensex, which may suggest some caution moving forward.