Is Sharika Enterpr. overvalued or undervalued?

As of 29 May 2025, the valuation grade for Sharika Enterprises Ltd. has moved from fair to risky, indicating a significant deterioration in its financial standing. The company appears to be overvalued, particularly given its negative PE ratio of -78.46 and an EV to EBIT ratio of -92.70, which suggest severe profitability issues. Additionally, the Price to Book Value stands at 3.57, further highlighting potential overvaluation concerns.
In comparison to its peers, Sharika's valuation metrics are alarming; for instance, its EV to EBITDA ratio of 92.70 starkly contrasts with industry norms, indicating a lack of earnings relative to its enterprise value. Notably, its ROE is at -2.50%, which is not competitive when compared to other companies in the sector. While Sharika has shown a strong 5-year return of 296.47%, recent performance has lagged behind the Sensex, particularly over the past year, where it returned 14.24% compared to the Sensex's 7.55%. This further reinforces the notion that the stock may not be justified at its current price levels.