Is Kitex Garments overvalued or undervalued?

As of 16 September 2025, the valuation grade for Kitex Garments 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 30.62, an EV to EBITDA of 26.02, and a Price to Book Value of 3.92, all of which suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison with peers, Kitex Garments' PE ratio is notably lower than K P R Mill Ltd's 45 but higher than Vardhman Textile's 14.87, which is classified as fair. The PEG ratio of 0.40 indicates that while the stock may be growing, it is still priced excessively relative to that growth. Despite a strong 3-year return of 177.71% compared to the Sensex's 40.01%, the current valuation metrics suggest that investors may be overestimating future growth potential.