Is Padam Cotton overvalued or undervalued?

As of 2 June 2025, the valuation grade for Padam Cotton Yarns Ltd. has moved from very expensive to expensive. The company is currently considered overvalued based on its financial ratios and peer comparisons. Key ratios include a PE ratio of 3.78, an EV to EBITDA of 27.35, and a PEG ratio of 0.01, which indicates a significant discrepancy between its earnings growth expectations and its current price.
In comparison to its peers, Padam Cotton's valuation appears high, especially when looking at similar companies in the industry. For instance, while Padam Cotton has a PE ratio of 3.78, other comparable firms may exhibit more favorable ratios, suggesting that investors might be overpaying for Padam Cotton's shares. Additionally, the company's recent stock performance has been underwhelming, with a year-to-date return of -61.14% compared to the Sensex's positive return of 5.56%, reinforcing the notion that the stock is not currently a sound investment.