Is Prima Industries overvalued or undervalued?

Jun 09 2025 03:16 PM IST
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As of May 31, 2024, Prima Industries is considered risky and overvalued due to its negative financial metrics and significant underperformance compared to peers and the Sensex.
As of 31 May 2024, the valuation grade for Prima Industries has moved from attractive to risky, indicating a significant deterioration in its financial standing. The company is currently deemed overvalued based on its negative PE ratio of -19.53, an EV to EBIT of -22.44, and a ROCE of -3.44%. These ratios suggest that the company is struggling to generate profits and is not effectively utilizing its capital.

In comparison to its peers, Prima Industries stands out unfavorably; for instance, Manorama Industries has a PE ratio of 73.92, while CIAN Agro boasts a much healthier PE of 31.9. The stark contrast in valuation metrics highlights the challenges Prima Industries faces within the edible oil industry. Additionally, the company's stock has underperformed relative to the Sensex, with a year-to-date decline of 38.16% compared to the Sensex's gain of 5.58%. This further reinforces the notion that Prima Industries is currently overvalued.
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