Is Padam Cotton overvalued or undervalued?

As of 30 June 2025, the valuation grade for Padam Cotton has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a PE ratio of 4.28, an EV to EBIT of 31.27, and an EV to EBITDA of 30.95. In comparison to peers, Lloyds Enterprises has a PE ratio of 199.47, while PTC India, which is considered very attractive, has a PE ratio of 9.34, highlighting the stark contrast in valuation metrics.
Despite a remarkable one-year stock return of 281.57%, the company's fundamentals suggest it is not justified at its current price of 4.58. The high Price to Book Value of 5.77 and an alarming ROCE of -15.07% further reinforce the notion that Padam Cotton is trading at an inflated valuation compared to its industry peers.