Is Vardhman Textile overvalued or undervalued?

As of 4 June 2025, Vardhman Textile's valuation grade has moved from very expensive to expensive, indicating a shift in its perceived market value. The company is currently deemed overvalued. Key ratios include a PE Ratio of 15.86, an EV to EBITDA of 11.64, and a PEG Ratio of 0.40, which suggests that while the company has a reasonable earnings multiple, its growth prospects may not justify its current price.
In comparison with peers, Vardhman Textile's PE Ratio is significantly lower than K P R Mill Ltd, which stands at 47.51, and Trident, which is at 42.6, highlighting that Vardhman may not be as aggressively priced as some competitors. However, it is still positioned in the expensive category, with a lower EV to EBITDA than Welspun Living at 11.77. Notably, Vardhman Textile has underperformed against the Sensex in the year-to-date period, with a return of -4.17% compared to the Sensex's 5.58%, reinforcing the notion of its overvaluation in the current market context.