Is Visa Steel overvalued or undervalued?

As of 1 July 2021, Visa Steel's valuation grade has moved from does not qualify to risky, indicating a significant shift in its perceived financial health. The company appears to be overvalued based on its financial ratios, which include a PE ratio of -7.40, an EV to EBITDA of 55.12, and a ROCE of -4.47%. These metrics suggest that the company's earnings and overall performance are not only weak but also negative, which is concerning for potential investors.
In comparison to its peers, Visa Steel's valuation stands out unfavorably. For instance, JSW Steel has a PE ratio of 64.98 and an EV to EBITDA of 14.20, while Tata Steel shows a PE of 51.92 and an EV to EBITDA of 11.04. The stark contrast in these ratios highlights that Visa Steel is not only underperforming relative to its competitors but also carries a higher risk profile. Additionally, Visa Steel's recent stock performance has lagged behind the Sensex, with a year-to-date return of -11.97% compared to the Sensex's 5.60%, reinforcing the notion that the stock may not be a prudent investment at its current price level.