Is Dabur India overvalued or undervalued?

As of 3 November 2024, Dabur India's valuation grade has moved from does not qualify to expensive, indicating a significant shift in its market perception. The company is currently considered overvalued. Key ratios include a PE ratio of 48.29, an EV to EBITDA of 36.11, and a Price to Book Value of 7.90, all suggesting that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Dabur India’s PE ratio is lower than Hindustan Unilever's 53.88 and Nestle India's 75.2, but still reflects a high valuation in the FMCG sector. Other peers like Britannia Industries and Godrej Consumer also exhibit elevated valuations, with PE ratios of 61.44 and 65.35, respectively. Notably, Dabur's recent stock performance has lagged behind the Sensex, with a 1-year return of -20.95% compared to the Sensex's 7.58%, further reinforcing the view that the stock is overvalued in the current market environment.