Is Svarnim Trade Ud overvalued or undervalued?

As of 2 January 2025, Svarnim Trade Ud has moved from a "does not qualify" to a "risky" valuation grade, indicating a significant downgrade in its investment appeal. The company appears to be overvalued given its current financial metrics, including a PE ratio of 0.00, a price to book value of -4.45, and an EV to EBITDA ratio of -4.49. These ratios suggest that the company is not generating positive earnings or book value, which is a concerning sign for potential investors.
In comparison to its peers, Svarnim Trade Ud's valuation metrics starkly contrast with those of K.P.R. Mill Ltd., which has a PE ratio of 47.51 and an EV to EBITDA of 30.99, indicating a much healthier financial position. Similarly, Trident Ltd. has a PE ratio of 42.6 and an EV to EBITDA of 18.36, further highlighting the relative weakness of Svarnim Trade Ud in the garments and apparels sector. Additionally, the company's stock has underperformed compared to the Sensex, with a year-to-date return of -37.86% against the Sensex's 5.58%, reinforcing the notion that Svarnim Trade Ud is currently overvalued.