Is Gayatri Projects overvalued or undervalued?

As of 31 March 2023, Gayatri Projects has moved from a "does not qualify" to a "risky" valuation grade, indicating increased concerns regarding its financial health. The company is currently deemed overvalued, particularly when compared to its peers. Key ratios for Gayatri Projects include a price-to-earnings (PE) ratio of -0.1232, an enterprise value to EBITDA (EV/EBITDA) of -4.1379, and a price/earnings growth (PEG) ratio of 0.00, which highlight its financial struggles.
In contrast, peers like Larsen & Toubro, which holds an attractive valuation with a PE ratio of 34.21, and GMR Airports, classified as risky but with a PE of 33.47, demonstrate more favorable financial metrics. The stark difference in valuation and performance ratios suggests that Gayatri Projects is not only underperforming but also carries significant risk compared to its industry counterparts. Notably, while the company's stock has outperformed the Sensex in the short term, with a 1-month return of 23.58% compared to the Sensex's 3.87%, the long-term performance remains concerning, with a 5-year return of -49.27% compared to the Sensex's 143.05%.