Is Ekennis Software overvalued or undervalued?

As of 1 February 2024, Ekennis Software's valuation grade has moved from very attractive to risky, indicating a significant shift in its market perception. The company is currently assessed as overvalued, primarily due to its low profitability metrics and unfavorable comparisons with peers. Key ratios include a PE ratio of 7.84, an EV to EBITDA of 5.16, and a ROE of just 0.20%.
In comparison to its peers, Ekennis Software's PE ratio is notably lower than that of Tata Consultancy Services Ltd. at 25.23 and Infosys Ltd. at 24.32, both of which are rated attractive and fair, respectively. Furthermore, the company's EV to EBIT ratio of -5.16 raises concerns about its operational efficiency. Recent stock performance has also been dismal, with a year-to-date return of -40.36%, contrasting sharply with the Sensex's positive return of 5.56%, reinforcing the notion that Ekennis Software may be overvalued in the current market environment.