Is Arex Industries overvalued or undervalued?

As of 23 September 2025, Arex Industries has moved from an attractive to a fair valuation grade. The company appears to be fairly valued based on its current metrics, with a PE ratio of 28.83, an EV to EBITDA of 9.66, and a ROE of 8.02%. In comparison to its peers, K P R Mill Ltd is considered very expensive with a PE ratio of 46.3, while Vardhman Textile is also rated fair with a PE of 14.19, indicating that Arex Industries is positioned in a more moderate valuation range relative to its industry.
Despite its fair valuation, Arex Industries has underperformed compared to the Sensex, with a year-to-date return of -7.41% against the Sensex's 5.07%. This underperformance, along with the recent grade change, suggests that while the company is not overvalued, it may face challenges in enhancing shareholder value in the near term.