Is Indag Rubber overvalued or undervalued?

As of 12 February 2025, the valuation grade for Indag Rubber has moved from very attractive to risky. This shift indicates a significant concern regarding the company's financial health and market positioning. The company appears to be overvalued, especially when considering its high PE ratio of 55.57 and an EV to EBITDA ratio of 193.65, which are substantially higher than many peers in the industry. For instance, Pix Transmission has a PE ratio of 19.3 and an EV to EBITDA of 13.43, while Apcotex Industries, considered fair, has a PE of 36.51.
Additionally, Indag Rubber's return on equity (ROE) stands at a mere 2.87%, and it has a negative return on capital employed (ROCE) of -2.40%. In comparison, Rubfila International, which is rated very attractive, has a significantly lower PE of 14.93 and a more favorable EV to EBITDA of 8.82. The company's recent stock performance shows a 1-month return of 14.00%, outperforming the Sensex's 3.84%, but this is overshadowed by a year-to-date decline of 18.97% compared to the Sensex's 5.59% gain. Overall, these metrics suggest that Indag Rubber is not only overvalued but also facing considerable risks moving forward.