Is Parmax Pharma overvalued or undervalued?

As of 1 February 2024, the valuation grade for Parmax Pharma has moved from attractive to risky, indicating a significant downgrade in its perceived value. The company is currently assessed as overvalued, with a PE ratio of -14.03, an EV to EBIT of -21.92, and a Price to Book Value of -7.19. These ratios suggest that the company is struggling financially, as reflected in its negative return on capital employed (ROCE) of -13.70% and negative return on equity (ROE).
In comparison to its peers, Parmax Pharma stands out negatively against companies like Cipla Ltd., which has a PE ratio of 22.99 and an EV to EBITDA of 15.93, and Dr. Reddy's Laboratories Ltd., with a PE of 19.49 and an EV to EBITDA of 12.87. The stark contrast in valuation metrics underscores the challenges Parmax Pharma faces within the pharmaceuticals and biotechnology industry. Additionally, the company's recent stock performance has been disappointing, with a year-to-date return of -10.06%, significantly lagging behind the Sensex's 5.58% return.