Is Golden Carpets overvalued or undervalued?

As of 12 November 2024, the valuation grade for Golden Carpets has moved from does not qualify to risky, indicating a significant shift in its financial outlook. The company is currently deemed overvalued based on its negative PE ratio of -8.16, an EV to EBITDA of -12.50, and a ROCE of -7.92%. These ratios highlight the company's struggles in generating profits and managing capital effectively.
In comparison to its peers, Golden Carpets stands out negatively; for instance, K.P.R. Mill Ltd. has a PE ratio of 47.51, while Trident Ltd. maintains a PE of 42.6, both of which are significantly more favorable. The stark contrast in valuation metrics suggests that Golden Carpets is not only underperforming but also carries a higher risk profile relative to its industry. Additionally, the stock has underperformed against the Sensex over the past week, declining by 4.93% while the index gained 1.38%. This further reinforces the perception of overvaluation in the current market context.