Sri KPR Industries Ltd Valuation Shifts: From Expensive to Fair Amid Market Challenges

Valuation Metrics Signal Improved Price Attractiveness

As of 20 Feb 2026, Sri KPR Industries Ltd trades at a P/E ratio of 6.88, a significant moderation from previous levels that had positioned the stock as expensive relative to its peers. This P/E ratio now aligns the company within the 'fair' valuation category, contrasting sharply with industry heavyweights such as Apollo Pipes and Rajoo Engineers, which command P/E ratios of 44.83 and 18.44 respectively, both classified as expensive.

The company’s price-to-book value stands at a remarkably low 0.33, indicating that the stock is trading at roughly one-third of its book value. This low P/BV ratio often signals undervaluation, although it may also reflect underlying concerns about asset quality or profitability. In comparison, peers like Tarsons Products and Commercial Synbags maintain higher P/BV multiples consistent with their market positioning.

Other valuation metrics such as EV to EBITDA and EV to EBIT remain negative for Sri KPR Industries, at -0.72 and -1.34 respectively, signalling challenges in earnings before interest, taxes, depreciation and amortisation. This contrasts with competitors who report positive multiples, underscoring the company’s ongoing operational hurdles.

Financial Performance and Returns: A Mixed Picture

Despite the improved valuation, Sri KPR Industries’ financial performance remains under pressure. The company reported a return on equity (ROE) of 4.83%, which is modest and suggests limited profitability relative to shareholder equity. Additionally, the return on capital employed (ROCE) is negative due to negative capital employed, highlighting inefficiencies in capital utilisation.

Examining stock returns relative to the Sensex index reveals a mixed trend. Over the past week, Sri KPR Industries marginally outperformed the Sensex with a 0.14% gain versus the benchmark’s 1.41% decline. However, over longer periods, the stock has underperformed significantly. Year-to-date, the stock is down 6.16% compared to the Sensex’s 3.19% decline, and over the past year, the stock has fallen 12.78% while the Sensex gained 8.64%. Even over a five-year horizon, the stock’s 59.34% return trails the Sensex’s 62.11% gain, and over ten years, the stock has declined 7.19% against the Sensex’s robust 247.96% growth.

Peer Comparison Highlights Valuation Divergence

Within the Plastic Products - Industrial sector, Sri KPR Industries’ valuation contrasts markedly with its peers. Apollo Pipes and Rajoo Engineers remain expensive, with P/E ratios of 44.83 and 18.44 respectively, while Tarsons Products and Commercial Synbags are categorised as fairly valued with P/E multiples of 49.07 and 26.99. Notably, Ester Industries and Pyramid Technoplast are considered attractive or very attractive investments, despite some reporting losses or higher EV to EBITDA multiples.

The company’s PEG ratio stands at zero, reflecting either a lack of earnings growth or an absence of meaningful growth expectations, which is a concern compared to peers like Premier Polyfilm with a PEG of 2.84, indicating growth potential priced into the stock.

Market Capitalisation and Analyst Ratings

Sri KPR Industries holds a market capitalisation grade of 4, indicating a micro-cap status with limited liquidity and market presence. The company’s Mojo Score has deteriorated to 26.0, resulting in a downgrade from a 'Sell' to a 'Strong Sell' rating as of 21 Nov 2024. This downgrade reflects concerns over the company’s financial health, valuation metrics, and relative performance within its sector.

Despite the recent price correction, the stock’s day change on 20 Feb 2026 was negative at -3.60%, signalling continued selling pressure. The current price of ₹21.16 is closer to its 52-week low of ₹19.01 than its high of ₹38.01, underscoring the stock’s volatility and investor caution.

Outlook and Investor Considerations

While Sri KPR Industries’ valuation metrics have improved, signalling a more attractive entry point for value investors, the company’s operational challenges and subdued returns relative to the Sensex and sector peers warrant caution. The negative EV to EBIT and EV to EBITDA multiples highlight ongoing profitability issues, and the low ROE and negative ROCE suggest that capital efficiency remains a concern.

Investors should weigh the stock’s low valuation against its fundamental weaknesses and consider the broader sector dynamics. The Plastic Products - Industrial sector includes companies with a wide range of valuations and growth prospects, from expensive, high-growth names to attractively valued but operationally challenged firms like Sri KPR Industries.

Given the downgrade to a Strong Sell rating and the company’s modest financial metrics, a defensive stance may be prudent until clearer signs of operational turnaround and earnings growth emerge. Meanwhile, comparative analysis with peers offering better growth and profitability profiles could yield more favourable investment opportunities.

Summary

Sri KPR Industries Ltd’s shift from expensive to fair valuation, reflected in a P/E of 6.88 and a P/BV of 0.33, marks a significant change in price attractiveness. However, persistent negative earnings multiples, low returns on equity, and underperformance against the Sensex temper enthusiasm. The downgrade to a Strong Sell rating by MarketsMOJO underscores the need for investors to approach the stock with caution and consider alternative options within the sector.

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