Is Cedaar Textile overvalued or undervalued?

As of 28 August 2025, Cedaar Textile's valuation grade has moved from does not qualify to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued based on its current metrics, particularly with a PE ratio of 14.20, an EV to EBITDA of 10.29, and a ROE of 43.79%. These ratios suggest that while the company is generating returns, its valuation does not align favorably with its peers.
In comparison to its industry, Cedaar Textile's PE ratio is significantly lower than that of K P R Mill Ltd, which stands at 40.73, and is also below Trident's PE of 32.1, indicating that Cedaar may not be justifying its current price in the market. Furthermore, the company's lack of a dividend yield and a PEG ratio of 0.00 raises concerns about its growth prospects. Recent stock performance shows that Cedaar Textile has underperformed relative to the Sensex over the past year, further reinforcing the notion that it is overvalued in the current market environment.