Is Shanti Overseas overvalued or undervalued?

As of 1 June 2023, the valuation grade for Shanti Overseas has moved from fair to risky, indicating a significant deterioration in its financial standing. The company is currently overvalued, as evidenced by its troubling headline ratios: a PE ratio of -8.31, an EV to EBIT of -5.47, and a ROCE of -37.34%. These figures suggest that the company is not generating sufficient earnings relative to its valuation metrics.
In comparison to its peers, Shanti Overseas stands out negatively, particularly against the industry average, which typically features positive PE and EV/EBITDA ratios. For instance, while Shanti has a PE ratio of -8.31 and an EV to EBITDA of -5.63, other companies in the sector are likely to show positive values, reinforcing the perception of overvaluation. Additionally, the stock has underperformed against the Sensex over the past week, with a return of -7.79% compared to the index's gain of 1.65%, further highlighting the risks associated with investing in this company.