Is Aayush Wellness overvalued or undervalued?

Oct 03 2025 08:04 AM IST
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As of October 1, 2025, Aayush Wellness is overvalued with a PE ratio of 79.85 and other high valuation multiples, despite strong returns on capital, leading to a significant premium compared to peers and poor stock performance year-to-date.
As of 1 October 2025, Aayush Wellness has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, with a PE ratio of 79.85, a Price to Book Value of 41.18, and an EV to EBITDA ratio of 94.09. These figures significantly exceed those of its peers, such as Sun Pharma with a PE of 34.22 and Divi's Lab at 65.66, indicating a substantial premium for Aayush Wellness that may not be justified by its financial performance.

Additionally, while Aayush Wellness boasts impressive returns on capital with a ROCE of 41.99% and ROE of 51.57%, these metrics do not compensate for the high valuation multiples it commands. The company's recent stock performance has also been lackluster, with a year-to-date return of -43.94% compared to a 3.64% gain in the Sensex, reinforcing the notion that the stock may be trading at unsustainable levels.
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