Is BGR Energy Sys. overvalued or undervalued?

As of 15 November 2022, BGR Energy Systems has moved from an attractive to a risky valuation grade. The company appears to be overvalued, given its negative PE ratio of -0.85, a Price to Book Value of -0.51, and an EV to EBITDA of -7.45. These ratios indicate significant financial distress, particularly with a Return on Capital Employed (ROCE) of -32.43% and a negative Return on Equity (ROE) due to a negative book value.
In comparison to its peers, BGR Energy Systems stands out unfavorably against Larsen & Toubro, which has a PE ratio of 34.21 and an EV to EBITDA of 17.35, and GMR Airports, which is also categorized as risky but has a PE ratio of 33.47. The stark contrast in valuation metrics highlights the challenges BGR Energy Systems faces in the construction industry. Despite recent stock performance showing a 188.72% return over the past year compared to the Sensex's 7.58%, the underlying financial ratios suggest that the company's current valuation is not sustainable.