Is RSWM Ltd overvalued or undervalued?

As of 10 November 2025, RSWM Ltd's valuation grade has moved from very attractive to attractive, indicating a shift in perceived value. The company is currently considered overvalued based on its high PE ratio of 87.98 and an EV to EBIT of 141.76, which are significantly above industry norms. In contrast, Vardhman Textile, a peer with an attractive rating, has a PE ratio of 15, highlighting the disparity in valuation.
Additionally, RSWM's ROCE stands at a mere 0.40%, and its ROE is only 0.06%, suggesting inefficiency in generating returns compared to its equity. The PEG ratio of 0.80 does provide some optimism, but the overall financial metrics indicate that RSWM Ltd is not aligned with its peers, such as K P R Mill Ltd, which is categorized as very expensive with a PE of 42.57. Recent stock performance shows that RSWM has underperformed the Sensex over the past year, further supporting the conclusion of overvaluation.