Is Vardhman Textile overvalued or undervalued?

As of 1 July 2025, Vardhman Textile's valuation grade has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently assessed as overvalued. Key ratios reveal a PE Ratio of 16.51, an EV to EBITDA of 12.09, and a PEG Ratio of 0.41, which suggest that despite a relatively low PE, the overall valuation metrics are not supportive of a favorable investment outlook.
In comparison to peers, Vardhman Textile's valuation stands out against K P R Mill Ltd, which has a much higher PE of 46.46, and Trident, which is rated fair with a PE of 42.97. This indicates that Vardhman is not only more expensive than some of its peers but also lacks the growth potential reflected in its PEG ratio. Additionally, while Vardhman has shown strong returns over the past three years at 85.73%, its year-to-date performance of -0.93% contrasts with the Sensex's 7.11% gain, reinforcing the notion that the stock may be overvalued in the current market environment.