Is Rajnandini Metal overvalued or undervalued?

As of 9 June 2025, Rajnandini Metal has moved from a fair to an attractive valuation grade. The company appears to be undervalued, particularly given its current PE ratio of -79.89 and an EV to EBITDA of 73.70, which are significantly higher than its peers. For instance, PTC India, which is rated very attractive, has a PE ratio of 9.11 and an EV to EBITDA of 4.18, indicating that Rajnandini Metal is trading at a substantial discount relative to more stable companies in the industry.
In terms of performance metrics, Rajnandini Metal's ROCE stands at 5.09%, while its ROE is -3.67%, highlighting operational challenges. The EV to Capital Employed ratio of 1.75 suggests that the market may be undervaluing the company's assets. Despite recent stock performance lagging behind the Sensex, with a YTD return of -36.02% compared to the Sensex's 6.17%, the overall valuation suggests potential upside for investors willing to take on the associated risks.