Is Cipla overvalued or undervalued?

As of 9 May 2025, Cipla's valuation grade has moved from fair to attractive, indicating a positive shift in its perceived value. The company is currently considered undervalued. Key ratios include a PE Ratio of 22.99, an EV to EBITDA of 15.93, and a PEG Ratio of 0.97, which suggests that the stock is priced favorably relative to its growth potential.
In comparison to its peers, Cipla's valuation appears more appealing, especially when contrasted with Sun Pharma's PE Ratio of 35.25 and Divi's Lab's significantly high PE Ratio of 79.33. Additionally, Dr. Reddy's Labs, which is also rated attractive, has a lower PE Ratio of 19.49, further supporting the notion that Cipla is undervalued in its sector. While Cipla's recent stock performance has lagged behind the Sensex on a year-to-date basis, its strong return over three years at 54.92% reinforces its potential for growth.