Is Lux Industries overvalued or undervalued?

As of 1 July 2025, the valuation grade for Lux Industries has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently considered overvalued. Key ratios include a PE ratio of 26.50, an EV to EBITDA of 19.05, and a Price to Book Value of 2.53, which suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Lux Industries' PE ratio is notably lower than K P R Mill Ltd, which has a PE of 46.46, but higher than Vardhman Textile at 16.51. Additionally, the PEG ratio of 0.96 indicates that despite the high valuation, growth expectations may not justify the current price. Recent performance shows that Lux Industries has underperformed with a year-to-date return of -27.45%, contrasting sharply with the Sensex's gain of 7.11% in the same period, reinforcing the notion of overvaluation.