Is R J Shah & Co overvalued or undervalued?

As of 13 June 2025, the valuation grade for R J Shah & Co has moved from risky to does not qualify, indicating a significant shift in its perceived investment quality. Based on the current analysis, the company appears to be undervalued. Key ratios supporting this conclusion include a PE ratio of 2.05, an EV to EBIT of 2.13, and a PEG ratio of 0.04, all of which suggest that the company is trading at a substantial discount compared to its earnings potential.
In comparison to its peers, R J Shah & Co's valuation metrics stand out, particularly against companies like Rail Vikas, which has a PE ratio of 66.21, and Tube Investments with a PE of 84.02, both categorized as very expensive. Additionally, the company's recent stock performance has lagged behind the Sensex, with a year-to-date return of -18.85% compared to the Sensex's positive return of 3.81%. This underperformance, coupled with the low valuation ratios, reinforces the notion that R J Shah & Co is currently undervalued in the market.