Is Pasari Spinning overvalued or undervalued?

As of 10 September 2025, the valuation grade for Pasari Spinning has moved from risky to does not qualify, indicating a significant shift in its financial standing. The company is currently assessed as overvalued based on its financial ratios and peer comparisons. Key ratios include a PE ratio of 12.27, an EV to EBITDA of 13.83, and a ROE of 42.00%.
In comparison to its peers, Pasari Spinning's valuation metrics are notably lower than those of K P R Mill Ltd, which has a PE ratio of 41.3, and Trident, with a PE ratio of 34.03. This suggests that while Pasari Spinning's ratios may appear reasonable, they are not compelling enough to justify its current price, especially given the higher valuations of its competitors. Additionally, despite a strong historical performance over the long term, the recent stock performance has lagged behind the Sensex, particularly in the year-to-date and one-year periods, further reinforcing the view that the stock is overvalued.