Is Soma Papers overvalued or undervalued?

As of 12 November 2024, Soma Papers has moved from a grade of "does not qualify" to "risky." The company is currently overvalued based on its financial metrics, which include a PE ratio of -9.22, an EV to EBIT of -9.17, and a ROE of -36.00%. These ratios indicate significant financial distress and a lack of profitability, which are concerning signs for potential investors.
In comparison to its peers, Soma Papers stands out negatively; for instance, JK Paper Ltd. has a PE ratio of 15.48 and an EV to EBITDA of 8.36, while West Coast Paper Mills Ltd. shows a PE of 10.55 and an EV to EBITDA of 5.21. The stark contrast in these ratios highlights the challenges faced by Soma Papers in the current market. Additionally, the company's stock has underperformed over the past year, with a return of -19.81% compared to the Sensex's 7.55%, further reinforcing the notion that it is overvalued at its current price of 72.30.