Is Mahasagar Travel overvalued or undervalued?

As of 25 April 2023, Mahasagar Travel's valuation grade has moved from does not qualify to risky, indicating a shift in perception regarding its financial health. The company appears to be undervalued, particularly when considering its low PE ratio of 4.46 and an EV to EBITDA ratio of 4.56, which are significantly below industry norms. However, the negative book value reflected in its Price to Book ratio of -4.46 raises concerns about its financial stability.
In comparison to its peers, Mahasagar Travel's valuation metrics stand out starkly. For instance, IRCTC is categorized as very expensive with a PE ratio of 48.77, while Thomas Cook (I) is considered attractive with a PE of 30.89. This stark contrast suggests that Mahasagar Travel may be undervalued relative to its peers, despite its risky classification. Notably, the company has underperformed against the Sensex over the past year, with a stock return of -29.04% compared to the Sensex's 7.62%, which further emphasizes the potential for recovery if market conditions improve.