Is Vardhman Textile overvalued or undervalued?

As of 2 July 2025, Vardhman Textile's valuation grade has moved from very expensive to expensive, indicating a slight improvement in its valuation outlook. The company is currently considered overvalued. Key ratios include a PE ratio of 16.45, an EV to EBITDA of 12.05, and a PEG ratio of 0.41, which suggests that while the earnings growth potential may be attractive, the current price does not adequately reflect this potential when compared to its peers.
In comparison to its peers, Vardhman Textile's PE ratio is significantly lower than K P R Mill Ltd, which has a PE of 46.67, and Trident, which is at 42.35. This indicates that while Vardhman Textile is relatively more affordable within the sector, the overall valuation still leans towards being overvalued given the current market conditions. Notably, Vardhman Textile has outperformed the Sensex over the past three years with a return of 85.08% compared to the Sensex's 57.65%, but its year-to-date performance shows a decline of 1.28% against the Sensex's gain of 6.75%.