Is Aarey Drugs overvalued or undervalued?

Sep 30 2025 08:03 AM IST
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As of September 29, 2025, Aarey Drugs is considered overvalued with high valuation ratios, including a PE of 55.73 and an EV to EBITDA of 77.32, despite outperforming the Sensex year-to-date, suggesting its stock price may not reflect its earnings potential and financial health compared to peers like Optiemus Infra.
As of 29 September 2025, Aarey Drugs has moved from an attractive to a fair valuation grade. The company is currently considered overvalued based on its high valuation ratios, including a PE ratio of 55.73, an EV to EBITDA of 77.32, and a ROE of only 3.00%. These figures suggest that the stock price does not adequately reflect the company's earnings potential and financial health.

In comparison to its peers, Aarey Drugs' valuation appears significantly higher than that of Optiemus Infra, which has a PE ratio of 85.87 and an EV to EBITDA of 50.55, indicating that Aarey is trading at a premium despite its lower performance metrics. Additionally, while the stock has outperformed the Sensex in various time frames, including a 44.17% return year-to-date compared to the Sensex's 2.85%, the current valuation ratios indicate that the stock may not sustain this premium in the long run.
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