Is Kothari Ferment. overvalued or undervalued?

As of 27 June 2025, Kothari Ferment has moved from an attractive to a fair valuation grade. The company appears to be overvalued based on its current metrics. The PE ratio stands at a high 95.76, while the EV to EBITDA ratio is 11.66, indicating a premium valuation compared to its earnings potential. Additionally, the PEG ratio of 0.82 suggests that growth expectations may not justify the current price.
When compared to peers, Kothari Ferment's valuation is significantly higher than that of Hindustan Unilever, which has a PE ratio of 52.01, and Nestle India, with a PE ratio of 76.58. These comparisons highlight that Kothari Ferment is trading at a substantial premium relative to its industry counterparts. Furthermore, the company's recent stock performance has lagged behind the Sensex, particularly over the past year, where it reported a decline of 8.00% compared to the Sensex's 6.08% return.