Is Dipna Pharmachem overvalued or undervalued?

As of 28 August 2025, Dipna Pharmachem's valuation grade has moved from fair to expensive, indicating a significant shift in its market perception. The company is currently considered overvalued, with a PE ratio of 45.57, an EV to EBIT of 18.13, and an ROE of 2.52%. In comparison to its peers, Sun Pharma has a PE of 33.18 and an EV to EBITDA of 22.42, while Cipla presents a more attractive valuation with a PE of 23.65 and an EV to EBITDA of 16.67.
Despite a strong one-year stock return of 117.82%, which outperformed the Sensex's decline of 2.08%, the current valuation metrics suggest that Dipna Pharmachem is trading at a premium relative to its industry peers. The high PE ratio and low ROE indicate that investors may be overestimating future growth potential, reinforcing the conclusion that the company is overvalued in the current market environment.