Is Alkem Lab overvalued or undervalued?

As of 12 August 2025, the valuation grade for Alkem Lab has moved from attractive to fair, indicating a shift in its perceived value. The company is currently fairly valued. Key ratios include a PE ratio of 28.53, an EV to EBITDA of 24.16, and a ROE of 18.07%.
When compared to peers, Alkem Lab's valuation stands in contrast to Sun Pharma, which is considered expensive with a PE ratio of 33.93, and Cipla, which is rated attractive with a PE of 22.77. Notably, Alkem's PEG ratio of 2.12 suggests that while growth expectations are factored into its price, they may not justify the current valuation compared to its peers. Recent stock performance shows Alkem Lab has outperformed the Sensex over the past week and month, which may indicate positive short-term sentiment despite its longer-term underperformance.