Is Shah Foods overvalued or undervalued?

As of 16 October 2024, Shah Foods has moved from a grade of "does not qualify" to "risky." The company is currently overvalued, as indicated by its negative PE ratio of -8.90 and EV to EBITDA ratio of -8.77. The PEG ratio stands at 0.00, further emphasizing the lack of growth potential in relation to its valuation. In comparison to its peers, Shah Foods' valuation metrics starkly contrast with those of Hindustan Unilever, which has a PE ratio of 53.88, and Nestle India, with a PE ratio of 75.2. These comparisons highlight the significant disparity in valuation, suggesting that Shah Foods is not only underperforming but also carries a higher risk profile. Additionally, the company's stock has underperformed against the Sensex, particularly in the year-to-date period, where it has declined by 36.93% compared to the Sensex's gain of 5.58%.