Is Andhra Paper overvalued or undervalued?

As of 7 November 2025, the valuation grade for Andhra Paper has moved from expensive to risky, indicating a significant shift in its financial outlook. The company appears to be overvalued given its current metrics, with a PE ratio of 71.06, an EV to EBIT ratio of 150.24, and a negative EV to EBITDA of -47.78. These figures suggest that the stock is trading at a premium compared to its earnings and overall financial health.
In comparison to its peers, Andhra Paper's valuation stands out unfavorably. For instance, JK Paper, which is rated as fair, has a PE ratio of 22.04 and an EV to EBITDA of 10.05, while West Coast Paper, rated as attractive, has a PE ratio of 11.81 and an EV to EBITDA of 5.28. The stark contrast in these ratios reinforces the conclusion that Andhra Paper is overvalued. Additionally, the company's stock has underperformed relative to the Sensex, with a year-to-date return of -22.52% compared to the Sensex's 6.50%.