Is Rajapalayam Mill overvalued or undervalued?

As of 13 November 2025, Rajapalayam Mill's valuation grade has moved from very attractive to attractive, indicating a shift in perceived value. The company is currently assessed as undervalued, particularly when considering its PE ratio of 14.48, a Price to Book Value of 0.33, and an EV to EBITDA of 20.39. These ratios suggest that the stock is trading at a discount relative to its earnings and book value.
In comparison to its peers, Rajapalayam Mill stands out with a significantly lower PE ratio than K P R Mill Ltd, which is rated as very expensive at 44.36, and Trident, which is also expensive at 33.64. Additionally, the PEG ratio of Rajapalayam Mill at 0.01 indicates strong growth potential relative to its price, further supporting the undervaluation thesis. Despite recent underperformance compared to the Sensex, with a YTD return of -24.44% against the Sensex's 8.11%, the company's fundamentals suggest a more favorable outlook moving forward.