Is Prataap Snacks overvalued or undervalued?

As of 6 May 2025, the valuation grade for Prataap Snacks has moved from expensive to risky, indicating a significant shift in its perceived value. The company is currently considered overvalued, particularly given its troubling financial ratios, including a PE ratio of -556.16, an EV to EBIT of -133.70, and a ROCE of -2.72%. These figures suggest that the company is struggling to generate profits relative to its valuation.
In comparison to its peers, Prataap Snacks stands out with a notably high EV to EBITDA ratio of 56.19, while its PEG ratio remains at 0.00, indicating no growth expectations. Competitors in the FMCG sector, such as Britannia Industries with a PE of 45.32 and Hindustan Unilever with a PE of 61.20, highlight the disparity in valuation metrics. Despite a strong 1-year stock return of 31.35% compared to the Sensex's 7.59%, the underlying financials suggest that Prataap Snacks is not positioned favorably in the market.