Is Rajvir Inds. overvalued or undervalued?

As of 25 April 2023, the valuation grade for Rajvir Industries has moved from does not qualify to risky, indicating a notable shift in its perceived financial health. The company appears to be overvalued given its negative PE ratio of -0.10, an EV to EBIT of -6.50, and an EV to EBITDA of -7.57. These ratios suggest significant financial distress, particularly when compared to peers such as K P R Mill Ltd, which has a PE ratio of 47.51, and Trident, with a PE ratio of 42.6, both indicating a much healthier valuation.
The current price of Rajvir Industries stands at 11.63, down from a previous close of 12.24, reflecting a downward trend. The company's performance has been mixed compared to the Sensex, with a year-to-date return of 14.58% against the Sensex's 5.63%, but a stark contrast over longer periods, particularly a 10-year return of -75.02% compared to the Sensex's 211.69%. Overall, the combination of poor ratios and the company's classification as risky leads to the conclusion that Rajvir Industries is overvalued in the current market environment.