Is Star Paper Mills overvalued or undervalued?

As of 14 August 2025, the valuation grade for Star Paper Mills has moved from very attractive to attractive. The company is currently considered undervalued, with a PE ratio of 6.83, an EV to EBITDA ratio of 2.31, and a Price to Book Value of 0.42. These metrics suggest that the stock is trading at a significant discount compared to its peers. For instance, JK Paper, which is also rated attractive, has a PE ratio of 17.34, indicating a substantial valuation gap.
In comparison to other industry players, Star Paper Mills shows a more favorable valuation profile, particularly with its low EV to Sales ratio of 0.18. While the company has faced some challenges, reflected in its year-to-date return of -18.28% compared to a 3.15% gain in the Sensex, its strong dividend yield of 2.28% and ROCE of 11.45% provide a cushion for investors. Overall, Star Paper Mills presents a compelling investment opportunity given its current valuation metrics relative to peers.