Is Bright Solar overvalued or undervalued?

As of 7 March 2025, Bright Solar's valuation grade has moved from does not qualify to risky, indicating a significant deterioration in its financial outlook. The company is currently assessed as overvalued, given its negative PE ratio of -2.02, an EV to EBITDA of -1.10, and a ROCE of -13.87%. These ratios suggest that Bright Solar is struggling to generate positive returns and is not performing well relative to its peers.
In comparison to its industry peers, Bright Solar's metrics are starkly unfavorable. For instance, ELGI Equipments Ltd. has a PE ratio of 47.88 and an EV to EBITDA of 31.31, while KSB Ltd. shows a PE of 59.09 and an EV to EBITDA of 42.75, both indicating robust valuations. Additionally, Bright Solar's stock has underperformed significantly, with a year-to-date return of -31.71%, contrasting sharply with the Sensex's gain of 6.23% over the same period. This further reinforces the conclusion that Bright Solar is overvalued in its current state.