Is Shah Alloys overvalued or undervalued?

As of 30 May 2023, Shah Alloys has moved from an attractive to a risky valuation grade. The company is currently considered overvalued based on its negative financial ratios, including a PE ratio of -5.40, an EV to EBITDA of -19.23, and a ROCE of -27.25%. These figures indicate significant financial distress compared to its peers.
In comparison to industry competitors, Shah Alloys' valuation metrics are starkly unfavorable. For instance, JSW Steel has a PE ratio of 64.98 and an EV to EBITDA of 14.20, while Tata Steel shows a PE of 51.92 with an EV to EBITDA of 11.04. This highlights the substantial gap in performance and valuation between Shah Alloys and its more stable peers. Additionally, the company's recent stock performance has lagged behind the Sensex, with a year-to-date return of -15.38% compared to the Sensex's 5.62%, further reinforcing the notion of overvaluation.