Is Shri Ram Switch. overvalued or undervalued?

As of 15 March 2024, the valuation grade for Shri Ram Switch has moved from does not qualify to risky, indicating a significant shift in its perceived investment quality. The company appears to be overvalued given its negative PE ratio of -1.58, a price to book value of -0.30, and an EV to EBITDA ratio of -43.74. These ratios suggest that the company is struggling financially, as evidenced by a return on capital employed (ROCE) of -4.47% and a return on equity (ROE) that is negative due to a negative book value.
In comparison to its peers, Shri Ram Switch stands out unfavorably; for instance, ABB has a PE ratio of 67.88 and an EV to EBITDA of 52.83, while BHEL shows a PE of 166.73 and an EV to EBITDA of 72.83, both indicating a much stronger financial position. The stark contrast in these ratios highlights that Shri Ram Switch is not only underperforming but also carries a higher risk profile in the market. Overall, the company's current valuation suggests it is overvalued, especially considering its poor stock performance over the past three years, where it has declined by 24.1% compared to a 52.41% increase in the Sensex.