Is Melstar Info. overvalued or undervalued?

As of 25 April 2023, the valuation grade for Melstar Info. has moved from does not qualify to risky, indicating a significant change in its perceived financial health. The company is currently assessed as overvalued, given its extremely low PE ratio of 0.54 and negative Price to Book Value of -1.73, which suggests that the market is not valuing its assets positively. Additionally, the EV to EBIT and EV to EBITDA ratios are both at -7.74, further highlighting the company's struggles in generating earnings relative to its enterprise value.
In comparison with its peers, Melstar Info.'s ratios starkly contrast with those of TCS, which has a PE ratio of 25.23 and an EV to EBITDA of 17.63, and Infosys, with a PE ratio of 24.32 and an EV to EBITDA of 15.83. This disparity underscores the challenges Melstar Info. faces in attracting investor confidence. While the stock has not shown returns in the recent past, the broader market, as represented by the Sensex, has delivered positive returns, reinforcing the notion that Melstar Info. is lagging behind its peers in performance and valuation.