Is Rajapalayam Mill overvalued or undervalued?

As of 17 November 2025, the valuation grade for Rajapalayam Mill has moved from very attractive to attractive. The company appears to be fairly valued based on its current financial metrics. The PE ratio stands at 14.52, while the Price to Book Value is notably low at 0.34, indicating potential undervaluation relative to its book value. However, the EV to EBIT ratio is quite high at 99.66, suggesting that the market may be pricing in significant future growth expectations.
In comparison to its peers, Rajapalayam Mill's PE ratio is significantly lower than K P R Mill Ltd, which is rated as very expensive with a PE of 44.24, and Trident, which is also attractive with a PE of 32.69. This positions Rajapalayam Mill favorably within its industry, particularly considering its PEG ratio of 0.01, which indicates that it may be undervalued relative to its growth prospects. Despite recent stock performance lagging behind the Sensex, with a year-to-date decline of 24.26% compared to the Sensex's gain of 8.72%, the overall valuation suggests that Rajapalayam Mill is fairly valued at this time.