Is Nandan Denim overvalued or undervalued?

As of 2 January 2025, Nandan Denim's valuation grade has moved from attractive to very attractive, indicating a significant improvement in its perceived value. The company is currently assessed as undervalued, particularly when considering its key ratios: a PE ratio of 17.18, an EV to EBITDA of 6.22, and a Price to Book Value of 0.93. These metrics suggest that the stock is trading at a discount relative to its earnings and asset value.
In comparison to its peers, Nandan Denim stands out favorably; for instance, K P R Mill Ltd is categorized as very expensive with a PE ratio of 47.51, while Trident is rated fair with a PE of 42.6. Additionally, the company's PEG ratio of 0.00 further emphasizes its undervaluation relative to growth expectations. Despite recent stock performance trailing behind the Sensex over the past year, with a return of -8.91% compared to the Sensex's 7.59%, the long-term outlook remains promising, particularly given its substantial 5-year return of 551.85%.