Vaxfab Enterprises Ltd Valuation Shifts to Very Attractive Amid Market Volatility

Valuation Metrics Show Marked Improvement

As of 6 Feb 2026, Vaxfab Enterprises trades at a P/E ratio of 8.88, a substantial discount compared to its peers in the Trading & Distributors sector. This figure is notably lower than the sector heavyweights such as Indiabulls, which trades at a P/E of 85.69, and A-1, with an eye-watering 576.92. The company’s price-to-book value stands at 4.89, which, while elevated relative to some peers, is justified by its robust return on capital employed (ROCE) of 61.79% and return on equity (ROE) of 55.06%.

Enterprise value multiples further underscore the stock’s valuation appeal. Vaxfab’s EV to EBIT and EV to EBITDA ratios are 6.09 and 6.06 respectively, indicating a relatively inexpensive valuation compared to sector averages. The EV to capital employed ratio of 3.76 and EV to sales of 0.52 reinforce the company’s efficient capital utilisation and operational scale.

Comparative Valuation Context

When benchmarked against its peer group, Vaxfab Enterprises emerges as a very attractive proposition. For instance, India Motor Part, another very attractive stock in the sector, trades at a P/E of 17.06 and EV to EBITDA of 21.59, both significantly higher than Vaxfab’s multiples. Similarly, Zuari Industries, also rated very attractive, trades at a P/E of 6.31 but carries a much higher EV to EBITDA of 45.82, suggesting a premium valuation on earnings before interest, taxes, depreciation and amortisation.

Conversely, several peers such as RRP Defense and STEL Holdings are classified as very expensive, with P/E ratios exceeding 30 and EV to EBITDA multiples above 20, highlighting the relative undervaluation of Vaxfab Enterprises.

Recent Rating Upgrade and Market Reaction

MarketsMOJO upgraded Vaxfab Enterprises’ Mojo Grade from Sell to Hold on 23 Oct 2025, reflecting the improved valuation landscape and the company’s strong fundamentals. The Mojo Score currently stands at 53.0, signalling a moderate investment appeal. Despite this, the stock experienced a day decline of 6.60% on 6 Feb 2026, closing at ₹40.50, down from the previous close of ₹43.36. The intraday range was ₹40.00 to ₹43.49, with the 52-week high at ₹51.98 and a low of ₹10.26, indicating significant volatility over the past year.

Performance Relative to Sensex and Historical Returns

Vaxfab Enterprises has delivered a remarkable 1-year return of 248.84%, vastly outperforming the Sensex’s 6.44% gain over the same period. Year-to-date, the stock has appreciated 7.63%, while the Sensex has declined 2.24%. However, over longer horizons, the stock’s performance is mixed. It has underperformed the Sensex over five years, with a negative return of 8.67% compared to the Sensex’s 64.22%, and marginally lagged over three years with a 34.78% gain versus the Sensex’s 36.94%.

Short-term volatility is evident, with a steep 18.13% decline over the past week despite the broader market’s 0.91% rise. The one-month return of -2.27% slightly outperforms the Sensex’s -2.49% over the same period, suggesting some resilience amid market fluctuations.

Quality and Growth Metrics Support Valuation

Vaxfab’s exceptionally high ROCE of 61.79% and ROE of 55.06% underscore the company’s operational efficiency and strong profitability. These metrics justify the relatively elevated P/BV ratio and support the very attractive valuation grade assigned by MarketsMOJO. The PEG ratio of 0.06 further indicates that the stock is undervalued relative to its earnings growth potential, a rare find in the Trading & Distributors sector.

Dividend yield data is not available, which may reflect a reinvestment strategy or capital allocation towards growth initiatives. Investors should weigh this alongside the company’s strong returns on capital and earnings growth prospects.

Investment Outlook and Considerations

Vaxfab Enterprises’ transition to a very attractive valuation grade signals a potential entry point for investors seeking exposure to the Trading & Distributors sector. The company’s strong profitability metrics and low valuation multiples relative to peers provide a compelling risk-reward profile. However, investors should remain cautious of the stock’s recent volatility and the broader market environment, which has seen mixed returns across timeframes.

Given the company’s micro-cap status and sector-specific risks, a Hold rating is prudent, reflecting balanced upside potential against near-term uncertainties. The Mojo Grade upgrade from Sell to Hold on 23 Oct 2025 aligns with this measured optimism, suggesting that while the stock is no longer unattractive, it may not yet warrant a full Buy recommendation without further confirmation of sustained earnings growth and market stability.

Comparative analysis with sector peers reveals that while Vaxfab is attractively priced, investors may also consider other very attractive stocks such as Zuari Industries and India Motor Part, which offer alternative risk-return profiles within the sector.

Conclusion

In summary, Vaxfab Enterprises Ltd’s improved valuation parameters, highlighted by a P/E ratio under 9 and robust returns on capital, have shifted the stock’s price attractiveness to very attractive territory. This re-rating is supported by a strong fundamental base and a favourable comparative valuation stance within the Trading & Distributors sector. While short-term price volatility and sector risks remain, the stock’s upgraded Mojo Grade and valuation metrics suggest it merits consideration for investors seeking value opportunities in micro-cap stocks.

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