Is Biocon overvalued or undervalued?

As of 5 September 2025, Biocon's valuation grade has moved from very attractive to attractive, indicating a shift in market perception. The company is currently considered overvalued, given its high PE ratio of 138.95, an EV to EBIT of 40.79, and a Price to Book Value of 2.24. In comparison, peers like Cipla and Dr. Reddy's Labs have more favorable valuations with PE ratios of 23.25 and 18.65, respectively, suggesting that Biocon's current valuation may not be justified relative to its industry.
While Biocon's recent performance shows a 4.69% return over the past week, it has underperformed the Sensex over the longer term, with a 1Y return of -4.96% compared to the Sensex's -1.81%. This trend, coupled with the company's low ROCE of 4.09% and ROE of 4.40%, reinforces the notion that Biocon may be overvalued in the current market environment.