Is Benara Bearings overvalued or undervalued?

As of 8 April 2025, the valuation grade for Benara Bearings has moved from risky to does not qualify, indicating significant concerns regarding its financial health. The company is currently overvalued, as evidenced by a PE ratio of -9.93 and an EV to EBITDA ratio of 59.19, which are both alarming indicators. Additionally, the return on equity (ROE) stands at -14.07%, further highlighting the company's struggles.
In comparison to its peers, Benara Bearings shows a stark contrast; for instance, its EV to EBITDA ratio is significantly higher than the industry average, which raises questions about its valuation. Other peers in the industrial manufacturing sector are likely performing better, as suggested by their more favorable ratios. Furthermore, while the company has seen a 21.88% return over the past year, this is overshadowed by a year-to-date decline of 12.73%, especially when compared to the Sensex's 5.58% gain during the same period. Overall, these factors suggest that Benara Bearings is not a sound investment at its current price.