Is Prakash Woollen overvalued or undervalued?

As of 13 February 2025, Prakash Woollen's valuation grade has moved from attractive to risky, indicating a significant deterioration in its financial standing. The company appears to be overvalued based on its current metrics, with a PE Ratio of -3.42, an EV to EBITDA of 85.07, and a ROE of -19.91%. These figures suggest that the company is struggling to generate profits and is not efficiently utilizing its equity.
In comparison to its peers, Prakash Woollen's valuation stands out unfavorably. For instance, K P R Mill Ltd is categorized as very expensive with a PE Ratio of 47.51, while Trident is considered fair with a PE Ratio of 42.6. The stark contrast in these ratios highlights Prakash Woollen's challenging position within the industry. Additionally, the company's stock has underperformed relative to the Sensex, particularly over the YTD and 1Y periods, which further reinforces the notion that it is overvalued at its current price of 30.60.