Pasupati Spinning & Weaving Mills Ltd: Valuation Shifts Signal Renewed Price Attractiveness

Valuation Metrics Signal Improved Price Attractiveness

Pasupati Spinning & Weaving Mills Ltd, operating within the Garments & Apparels sector, currently trades at a price of ₹32.99, up 7.11% from the previous close of ₹30.80. The stock’s 52-week range spans from ₹28.88 to ₹45.50, indicating room for upside relative to its recent lows. The company’s price-to-earnings (P/E) ratio stands at 32.77, a figure that has contributed to its upgraded valuation grade from very attractive to attractive as of 7 February 2026.

Complementing the P/E ratio, the price-to-book value (P/BV) is at 0.97, just below the book value, which often signals undervaluation. Other valuation multiples include an enterprise value to EBIT (EV/EBIT) of 20.03 and an EV to EBITDA of 12.85, both suggesting moderate pricing relative to earnings before interest and taxes and earnings before interest, taxes, depreciation, and amortisation respectively. The EV to capital employed ratio is notably low at 0.99, while EV to sales is 0.84, underscoring the stock’s relatively inexpensive valuation on a sales basis.

The PEG ratio, which adjusts the P/E for earnings growth, is 2.24, indicating that the stock is priced at over twice its expected earnings growth rate, a factor that tempers the valuation attractiveness somewhat.

Comparative Analysis with Industry Peers

When benchmarked against its peers in the Garments & Apparels industry, Pasupati Spinning & Weaving Mills Ltd’s valuation appears moderate. For instance, Himatsingka Seide enjoys a very attractive valuation with a P/E of 8.33 and a PEG of 0.18, reflecting strong growth prospects and lower relative price multiples. Conversely, companies such as R&B Denims and SBC Exports are classified as very expensive, with P/E ratios exceeding 46 and EV/EBITDA multiples above 34, indicating stretched valuations.

Sportking India and Indo Rama Synthetic, also rated attractive, trade at significantly lower P/E ratios of 11.68 and 8.03 respectively, with PEG ratios below 0.6, suggesting better growth-to-price alignment. Pasupati’s valuation, while improved, remains elevated relative to these peers, highlighting a premium that investors are currently willing to pay, possibly due to its market position or growth expectations.

Financial Performance and Returns Contextualised

Pasupati’s latest return on capital employed (ROCE) is 5.52%, and return on equity (ROE) is 2.96%, both modest figures that reflect limited profitability relative to capital and equity invested. These returns are below what might be expected for a company with a P/E above 30, suggesting that earnings quality and operational efficiency could be areas for improvement.

Examining stock returns relative to the Sensex reveals a nuanced picture. Over the past week, Pasupati outperformed the benchmark with a 10.26% gain versus the Sensex’s 2.94%. However, over the last month, the stock declined by 4.90%, underperforming the Sensex’s 0.59% rise. Year-to-date, the stock is essentially flat (-0.03%) while the Sensex is down 1.36%. Over longer horizons, Pasupati has delivered strong cumulative returns, notably a 372.64% gain over five years compared to the Sensex’s 63.78%, underscoring its potential as a long-term wealth creator despite short-term volatility.

Mojo Score and Rating Evolution

Pasupati Spinning & Weaving Mills Ltd currently holds a Mojo Score of 31.0, which corresponds to a Mojo Grade of Sell. This represents an upgrade from its previous Strong Sell rating as of 7 February 2026, signalling a modest improvement in the company’s overall investment appeal. The Market Cap Grade is 4, indicating a relatively small market capitalisation that may contribute to higher volatility and liquidity considerations for investors.

The upgrade in valuation grade from very attractive to attractive aligns with this rating improvement, suggesting that while the stock remains a cautious proposition, it is becoming more appealing on a price basis. Investors should weigh this against the company’s operational metrics and sector dynamics before committing capital.

Sector and Market Context

The Garments & Apparels sector has seen a range of valuation extremes, with some companies trading at very expensive multiples due to strong growth narratives, while others remain attractively priced. Pasupati’s valuation improvement may reflect market recognition of its relative stability or potential turnaround prospects, but it still faces competition from peers with stronger growth metrics and more compelling valuations.

Given the stock’s recent 7.11% intraday gain and a 52-week low near ₹28.88, there is evidence of renewed investor interest. However, the stock remains below its 52-week high of ₹45.50, indicating that significant upside may depend on operational improvements and broader sector momentum.

Investment Considerations and Outlook

Investors analysing Pasupati Spinning & Weaving Mills Ltd should consider the improved valuation parameters as a positive signal, especially the near book-value price and moderate EV multiples. However, the relatively high P/E and PEG ratios caution that the stock may still be priced for growth that is yet to fully materialise, given the company’s modest ROCE and ROE figures.

Comparisons with peers reveal that while Pasupati is no longer the cheapest option, it offers a balanced risk-reward profile within the sector. The stock’s strong five-year return of 372.64% versus the Sensex’s 63.78% highlights its potential for long-term capital appreciation, though recent short-term underperformance suggests volatility remains a factor.

Market participants should monitor upcoming quarterly results and sector developments closely, as these will be critical in validating the sustainability of the valuation upgrade and the company’s operational trajectory.

Summary

Pasupati Spinning & Weaving Mills Ltd’s shift in valuation grade from very attractive to attractive reflects a nuanced improvement in price attractiveness amid a complex performance landscape. While the stock’s multiples remain elevated compared to some peers, the upgrade in Mojo Grade and recent price gains indicate growing investor confidence. Careful analysis of financial returns and sector comparisons suggests that the stock may appeal to investors seeking exposure to the Garments & Apparels sector with a moderate risk appetite and a long-term horizon.

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