Is GKB Ophthalmics overvalued or undervalued?

As of 14 August 2023, the valuation grade for GKB Ophthalmics has moved from very expensive to risky, indicating a significant shift in its perceived value. The company is currently considered undervalued, particularly given its negative PE ratio of -5.36 and an EV to EBITDA ratio of -13.84, which highlight substantial financial distress. Additionally, the Price to Book Value stands at 0.73, suggesting that the market values the company below its book value.
In comparison to its peers, GKB Ophthalmics shows stark contrasts; for instance, Hindustan Unilever has a PE ratio of 53.88 and an EV to EBITDA of 37.14, while Nestle India exhibits even higher figures with a PE of 75.2 and an EV to EBITDA of 49.57. These comparisons underscore the challenges faced by GKB Ophthalmics, as it operates in a sector where competitors are significantly more valued. Furthermore, the company's recent stock performance has lagged behind the Sensex, with a year-to-date return of -24.04% compared to the Sensex's 5.63%, reinforcing the notion of its undervaluation amidst broader market trends.