Is Iris Clothings overvalued or undervalued?

As of 25 September 2025, the valuation grade for Iris Clothings has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently considered overvalued. Key ratios include a PE Ratio of 46.04, an EV to EBITDA of 24.24, and a Price to Book Value of 7.45, all of which are substantially higher than industry norms. In comparison with peers, K P R Mill Ltd has a PE Ratio of 44.72 and an EV to EBITDA of 29.6, while Vardhman Textile, which is rated fair, shows a PE Ratio of 14.06 and an EV to EBITDA of 10.21. This stark contrast highlights Iris Clothings' overvaluation relative to its competitors. Additionally, the company's recent performance has shown a decline, with a 1-year return of -11.46%, compared to a -4.28% return for the Sensex, further reinforcing the notion that the stock is overvalued.