Is Aarti Drugs overvalued or undervalued?

As of 26 May 2025, Aarti Drugs has moved from a fair to an attractive valuation grade. The company is currently considered undervalued, with a PE ratio of 25.26, an EV to EBITDA ratio of 16.91, and a ROE of 12.28%. In comparison to its peers, Aarti Drugs' valuation is more favorable than Sun Pharma, which is deemed expensive with a PE of 35.25, and Divi's Lab, categorized as very expensive with a PE of 79.33.
The company's performance metrics suggest it is positioned well within the pharmaceuticals and biotechnology sector. Notably, Aarti Drugs has a PEG ratio of 0.00, indicating potential for growth relative to its price. While the stock has underperformed the Sensex over the past year, its recent 1-month return of 11.43% outpaces the Sensex's 3.88%, reinforcing the attractiveness of its valuation.