Is Star Paper Mills overvalued or undervalued?

Aug 28 2025 08:03 AM IST
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As of August 26, 2025, Star Paper Mills is considered an attractive investment due to its undervalued status reflected in strong financial ratios, including a PE ratio of 6.94, an EV to EBITDA ratio of 2.45, and a Price to Book Value of 0.43, along with a dividend yield of 2.25% and a ROCE of 11.45%, despite a year-to-date return of -16.95% compared to the Sensex's 3.39%.
As of 26 August 2025, Star Paper Mills has moved from a fair to an attractive valuation grade. The company is currently considered undervalued based on its strong financial ratios, including a PE ratio of 6.94, an EV to EBITDA ratio of 2.45, and a Price to Book Value of 0.43. These figures suggest that the stock is trading at a significant discount compared to its intrinsic value.

In comparison to its peers, Star Paper Mills stands out with a much lower PE ratio than JK Paper, which has a PE of 18.26, and West Coast Paper at 13.64, indicating that Star Paper Mills may offer better value for investors. Additionally, the company's dividend yield of 2.25% and a ROCE of 11.45% further enhance its attractiveness. Despite recent underperformance against the Sensex, with a YTD return of -16.95% compared to the Sensex's 3.39%, the valuation metrics suggest that Star Paper Mills presents a compelling investment opportunity.
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