Is SPL Industries overvalued or undervalued?

As of 14 August 2025, SPL Industries has moved from a fair to a risky valuation grade. The company appears to be overvalued given its current financial ratios, including a PE ratio of 12.66, an EV to EBITDA ratio of 31.99, and a ROE of only 3.89%. In comparison to its peers, K P R Mill Ltd is considered very expensive with a PE of 39.62, while Vardhman Textile is fairly valued with a PE of 13.4, indicating that SPL Industries is not competitively priced within its industry.
The company's valuation metrics suggest it is overvalued, particularly with a negative EV to EBIT of -12.21 and a PEG ratio of 0.00, which raises concerns about future growth potential. Additionally, the stock has significantly underperformed compared to the Sensex, with a year-to-date return of -40.81% against the Sensex's positive return of 3.15%. This performance further supports the conclusion that SPL Industries is currently overvalued in the market.