Is SKS Textiles overvalued or undervalued?

As of 25 April 2023, the valuation grade for SKS Textiles has moved from does not qualify to risky, indicating a significant shift in perception regarding its financial health. The company appears to be undervalued given its current metrics, with a PE ratio of -0.39, an EV to EBITDA of -8.61, and a ROCE of -62.99%. These figures suggest that the company is struggling to generate positive returns and is facing substantial financial challenges.
In comparison to its peers, SKS Textiles stands out with a notably low PE ratio, while K.P.R. Mill Ltd. is categorized as very expensive with a PE ratio of 47.51, and Trident Ltd. is considered fair with a PE ratio of 42.6. The stark contrast in valuation ratios highlights the potential for SKS Textiles to be undervalued relative to its peers, despite its current risky classification. Over the past three years, the company has underperformed significantly, with a return of -45.88% compared to a 52.42% increase in the Sensex, reinforcing the need for cautious evaluation of its market position.