Perfectpac Ltd Valuation Shifts Signal Price Attractiveness Concerns Amid Sector Peers

Valuation Metrics Signal Elevated Pricing

As of 26 Feb 2026, Perfectpac Ltd’s P/E ratio stands at 17.86, a significant rise that places it in the ‘expensive’ category according to MarketsMOJO’s valuation grading. This contrasts with its previous fair valuation status and marks a clear shift in investor sentiment. The P/BV ratio is currently 1.44, indicating that the stock is trading at a premium to its book value, which further supports the expensive valuation narrative.

Other valuation multiples such as EV to EBIT (12.82) and EV to EBITDA (8.30) also suggest a stretched valuation, although these remain within moderate ranges when compared to some peers. The EV to Sales ratio is low at 0.49, which could imply some underlying revenue strength, but this is overshadowed by the elevated earnings multiples.

Peer Comparison Highlights Relative Expensiveness

When benchmarked against industry peers, Perfectpac’s valuation appears less attractive. For instance, Everest Kanto, a competitor in the same sector, trades at a P/E of 10.76 and is rated as fairly valued. Similarly, Kanpur Plastipack and Shree Jagdamba Polymers are classified as attractive or very attractive with P/E ratios of 10.94 and 11.95 respectively. Even Sh. Rama Multi, despite being expensive, has a lower P/E of 12.97 compared to Perfectpac’s 17.86.

Notably, Bluegod Entertainment is marked as very expensive with a P/E of 28.00, but this is an outlier in the sector. Perfectpac’s valuation places it in the upper quartile of pricing, which, combined with its financial performance, has led to a downgrade in its Mojo Grade from Sell to Strong Sell on 7 Feb 2025.

Financial Performance and Returns: A Mixed Picture

Despite the elevated valuation, Perfectpac’s recent stock performance has been lacklustre. The stock price closed at ₹85.01 on 26 Feb 2026, up 4.73% on the day, with a trading range between ₹79.29 and ₹90.00. However, the 52-week high of ₹134.80 and low of ₹76.65 indicate significant volatility over the past year.

Return analysis over various periods reveals a mixed trend. The stock has underperformed the Sensex over the short to medium term. For example, over the past one year, Perfectpac’s stock return was -27.34%, while the Sensex gained 10.29%. Year-to-date, the stock is down 1.56% compared to the Sensex’s decline of 3.46%. Over longer horizons, Perfectpac has outperformed the benchmark, with a five-year return of 251.57% versus Sensex’s 61.20%, and a remarkable ten-year return of 620.42% compared to Sensex’s 258.10%.

Profitability and Efficiency Metrics

From a profitability standpoint, Perfectpac’s latest return on capital employed (ROCE) is 12.79%, while return on equity (ROE) stands at 8.07%. These figures suggest moderate efficiency in generating returns from capital and equity, though they lag behind some peers in the sector. The dividend yield is modest at 1.18%, which may not be sufficiently attractive for income-focused investors.

The PEG ratio is reported as 0.00, which may indicate either a lack of earnings growth or data unavailability, adding to the uncertainty around valuation justification.

Market Capitalisation and Mojo Grade Implications

Perfectpac’s market cap grade is rated 4 on a scale where higher numbers indicate larger capitalisation, suggesting it is a mid-sized company within its sector. The downgrade to a Mojo Grade of Strong Sell from Sell reflects a deteriorating outlook based on valuation and relative price attractiveness. This downgrade was enacted on 7 Feb 2025, signalling that the company’s price multiples have become less appealing to investors over the past year.

Sector Context and Broader Market Comparison

The Paper, Forest & Jute Products sector has seen a range of valuation levels among its constituents. While some companies like Shree Tirupati Balaji Polymers are rated attractive despite a high P/E of 18.62, others such as Hitech Corporation are considered very attractive with a P/E of 53.68, likely due to superior growth prospects or other qualitative factors. Perfectpac’s valuation, therefore, must be viewed in the context of sector dynamics and individual company fundamentals.

Investor Takeaway: Valuation Caution Advised

Investors considering Perfectpac Ltd should exercise caution given the recent shift to an expensive valuation band and the downgrade to Strong Sell. The company’s elevated P/E and P/BV ratios, combined with underwhelming recent returns relative to the Sensex and peers, suggest limited upside potential at current price levels. While the company’s long-term returns have been impressive, the current premium valuation may not be justified by its profitability metrics or growth outlook.

Conclusion: Valuation Adjustments Reflect Market Realities

Perfectpac Ltd’s transition from fair to expensive valuation territory underscores the importance of monitoring price multiples in relation to earnings and book value. The company’s current P/E of 17.86 and P/BV of 1.44 exceed sector averages and peer benchmarks, signalling a potential overvaluation risk. Coupled with a Strong Sell Mojo Grade and modest profitability metrics, investors should carefully weigh the risks before committing fresh capital.

While the stock’s long-term performance remains commendable, the recent price appreciation may have outpaced fundamental improvements, warranting a cautious stance. Market participants are advised to consider alternative investments within the sector that offer more attractive valuations and stronger growth prospects.

Limited Period Only. Start at Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Get 71% Off →