Is Aurobindo Pharma overvalued or undervalued?

As of 14 May 2025, Aurobindo Pharma's valuation grade has moved from fair to attractive, indicating a positive shift in its perceived value. The company is currently assessed as undervalued, particularly when considering its PE ratio of 19.50, EV to EBITDA of 10.37, and ROCE of 15.01%. In comparison to peers, Aurobindo Pharma's PE ratio is significantly lower than Sun Pharma's 35.25 and Divi's Lab's 79.33, both of which are categorized as expensive.
The attractive valuation of Aurobindo Pharma is further supported by its competitive position within the industry, as evidenced by its PEG ratio of 3.71, which, while higher than some peers, still reflects a more favorable valuation compared to companies like Mankind Pharma, which is deemed expensive with a PEG of 48.81. Additionally, Aurobindo Pharma's recent stock performance has outpaced the Sensex over the past week, reinforcing the narrative of its undervaluation in the current market context.