Is Neelam Linens overvalued or undervalued?

As of 12 November 2025, Neelam Linens has moved from a fair to an expensive valuation grade. The company appears to be overvalued based on its financial ratios, with a PE ratio of 15.47, an EV to EBIT of 11.68, and an EV to EBITDA of 9.79. Compared to peers, Neelam Linens' valuation is significantly higher than Vardhman Textile, which has a PE of 15.34, and lower than K P R Mill Ltd, which is marked as very expensive with a PE of 44.49.
In the context of its industry, Neelam Linens' current valuation suggests it is overvalued, especially considering its recent stock performance, which has shown a significant decline year-to-date at -64.07%, while the Sensex has gained 9.44% in the same period. This disparity reinforces the notion that the stock may not be a favorable investment at its current price of 20.50.