Is Arex Industries overvalued or undervalued?

As of 19 August 2025, the valuation grade for Arex Industries has moved from attractive to fair. The company is currently fairly valued based on its financial ratios, with a PE ratio of 28.73, an EV to EBITDA of 9.63, and a ROE of 8.02%. In comparison to its peers, K P R Mill Ltd is considered very expensive with a PE of 41.46, while Vardhman Textile is fairly valued with a PE of 14.75.
Despite the fair valuation, Arex Industries has underperformed relative to the Sensex, particularly over the past year, where it reported a stock return of -20.31% compared to the Sensex's 1.52%. This underperformance may indicate potential concerns in the market regarding the company's growth prospects, despite its current valuation metrics.