Is Ambika Cotton overvalued or undervalued?

As of 14 November 2025, Ambika Cotton's valuation grade has moved from attractive to fair, indicating a shift in market perception. The company is currently fairly valued, with a PE ratio of 12.02, a Price to Book Value of 0.80, and an EV to EBITDA ratio of 5.45. In comparison to its peers, K P R Mill Ltd is considered very expensive with a PE of 43.91, while Vardhman Textile is fairly valued with a PE of 15.52.
Despite its fair valuation, Ambika Cotton has underperformed relative to the Sensex, with a year-to-date return of -19.63% compared to the Sensex's 8.22%. This underperformance, alongside its current ratios, suggests that while the company is not overvalued, it may face challenges in regaining investor confidence in the near term.