Is Kranti Industrie overvalued or undervalued?

As of 18 November 2024, the valuation grade for Kranti Industries Ltd. has moved from fair to risky, indicating a significant shift in its financial outlook. The company appears to be overvalued based on its current metrics, particularly with a PE ratio of -69.15 and an EV to EBIT of -161.11, which are alarming indicators of financial distress. Additionally, the EV to EBITDA stands at 32.56, suggesting that the company's earnings before interest, taxes, depreciation, and amortization are not sufficient to justify its current valuation.
In comparison to its peers, Kranti Industries is positioned unfavorably; for instance, its peers exhibit more stable ratios, with one notable competitor maintaining a PE ratio significantly above Kranti's negative figure. The company's return on capital employed (ROCE) is at -1.34%, and return on equity (ROE) is at -4.92%, further underscoring its underperformance relative to industry standards. While Kranti Industries has outperformed the Sensex over the past year with a return of 54.14% compared to the Sensex's 7.57%, this does not mitigate the concerns raised by its current valuation metrics.