Is Arvind Fashions overvalued or undervalued?

As of 17 September 2025, the valuation grade for Arvind Fashions has moved from very attractive to attractive. The company appears to be overvalued based on its current financial metrics. Key ratios include a PE ratio of -328.09, a Price to Book Value of 7.87, and an EV to EBITDA of 13.76, which suggest significant concerns regarding profitability and valuation relative to its assets.
In comparison to peers, Arvind Fashions' PE ratio is starkly negative, while Avenue Supermarts and Trent, both categorized as very expensive, have PE ratios of 113.37 and 116.91, respectively. This indicates that Arvind Fashions is not only underperforming in profitability but also priced higher than its financial health would suggest. Despite a strong 3-year stock return of 94.25% compared to the Sensex's 40.54%, the current valuation metrics highlight that the stock may not be justified at its current price of 564.60.