Is Rajnish Wellness overvalued or undervalued?

As of 2 June 2025, the valuation grade for Rajnish Wellness has moved from expensive to risky, indicating a significant shift in its perceived value. The company is currently considered overvalued. Key ratios highlight this concern: the PE ratio stands at an alarming 114.22, while the EV to EBITDA ratio is also at 114.00, both of which are substantially higher than industry peers. Additionally, the ROE is merely 0.07%, suggesting that the company is not generating adequate returns on equity.
In comparison to its peers, Rajnish Wellness's valuation metrics are starkly elevated. For instance, Hindustan Unilever has a PE ratio of 53.88, and Nestlé India shows a PE of 75.2, both indicating that Rajnish Wellness is trading at a premium relative to these established companies. Furthermore, the stock has underperformed significantly compared to the Sensex over the past year, with a return of -84.47% versus the Sensex's 7.55%, reinforcing the notion that the current valuation is not justified.