Is Netlink Solns(I) overvalued or undervalued?

As of 30 January 2025, the valuation grade for Netlink Solutions (I) has moved from very expensive to risky. The company is currently assessed as undervalued, given its low PE ratio of 7.95 and a price-to-book value of 1.40, which are significantly lower than its peers. Notably, the EV to EBITDA ratio stands at -16.48, indicating potential operational challenges.
In comparison to its peers, TCS and Infosys have PE ratios of 25.23 and 24.32, respectively, highlighting the relative undervaluation of Netlink Solutions (I). The company's return on equity (ROE) is a strong 17.66%, which contrasts with its negative ROCE of -10.60%, suggesting that while it is generating returns on equity, it is struggling with capital efficiency. Despite recent stock performance lagging behind the Sensex in the short term, the long-term returns of 231.13% over three years and 1008.44% over five years indicate a potential for recovery and growth.