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. In comparison to its peers, JK Paper has a significantly higher PE ratio of 17.34, while West Coast Paper is marked as expensive with a PE of 12.79, indicating that Star Paper Mills offers a more favorable valuation relative to these competitors.
Despite the recent downgrade in valuation grade, Star Paper Mills has shown resilience with a dividend yield of 2.28% and a return on capital employed (ROCE) of 11.45%. However, the stock has underperformed in the year-to-date period, with a return of -18.28% compared to a 3.15% gain in the Sensex, highlighting a disconnect between its valuation metrics and market performance. Overall, the company presents an attractive investment opportunity given its low valuation ratios relative to peers.