Is SPL Industries overvalued or undervalued?

As of 14 August 2025, SPL Industries has moved from a fair valuation to a risky one. The company is currently considered overvalued based on its financial metrics. The PE ratio stands at 12.66, while the Price to Book Value is notably low at 0.49, indicating potential concerns about asset valuation. Additionally, the EV to EBITDA ratio is quite high at 31.99, suggesting that the market is pricing the company aggressively compared to its earnings potential.
When compared to peers, SPL Industries' valuation appears less favorable. For instance, K P R Mill Ltd is categorized as very expensive with a PE ratio of 39.62, while Trident is considered fair with a PE of 32.66. Notably, SPL's ROE is only 3.89%, which is significantly lower than the industry average, further reinforcing its overvaluation status. The recent stock performance, with a year-to-date decline of 40.81% compared to a 3.15% gain in the Sensex, underscores the challenges the company faces in the current market environment.