Is Asian Hotels (N) overvalued or undervalued?

As of 14 February 2025, the valuation grade for Asian Hotels (N) has moved from attractive to risky. This indicates a significant deterioration in the company's financial outlook. The company is currently assessed as overvalued, particularly given its negative PE ratio of -7.29 and a price-to-book value of -301.78, both of which are alarming indicators of financial distress. Additionally, the EV to EBITDA ratio stands at 20.57, suggesting that investors are paying a premium for earnings that are not currently sustainable.
In comparison to its peers, Asian Hotels (N) is significantly lagging behind. For instance, Indian Hotels Co has a PE ratio of 66.81 and an EV to EBITDA of 39.96, while ITC Hotels shows a PE of 65.26 with an EV to EBITDA of 37.12. These figures highlight that Asian Hotels (N) is not only underperforming but is also trading at a premium despite its negative earnings outlook. Furthermore, while the company has shown impressive returns over the past year at 141.21%, this performance is juxtaposed against a backdrop of overall risk, making the current valuation concerning.