Is Salona Cotspin overvalued or undervalued?

As of 6 November 2025, Salona Cotspin's valuation grade has moved from very attractive to attractive, indicating a shift in its perceived investment quality. The company is currently considered overvalued, primarily due to its high PE ratio of 57.72 and a Price to Book Value of 1.66, which significantly exceeds the industry averages. Additionally, the EV to EBITDA ratio stands at 11.27, further suggesting that the stock may be priced too high relative to its earnings potential.
In comparison to its peers, K P R Mill Ltd is deemed very expensive with a PE of 43.81, while Trident is rated fair with a PE of 32.8. Notably, Vardhman Textile, which is also attractive, has a much lower PE of 14.68, highlighting the disparity in valuations within the sector. Despite a strong historical performance over the past decade with a return of 740.74%, recent trends show that Salona Cotspin has underperformed relative to the Sensex, particularly over the past year with a decline of 14.76%. This combination of high valuation ratios and recent stock performance suggests that investors should approach Salona Cotspin with caution.