Is Dipna Pharmachem overvalued or undervalued?

As of 7 November 2025, the valuation grade for Dipna Pharmachem has moved from expensive to very expensive. The company is currently overvalued based on its financial ratios and peer comparisons. The PE ratio stands at 49.38, while the EV to EBITDA ratio is 18.75, and the ROE is a mere 2.52%. These figures indicate a significant premium over its peers, such as Sun Pharma with a PE of 35.17 and Cipla with a PE of 22.33, both of which are in a more favorable valuation range.
In comparison to its industry, Dipna Pharmachem's valuation metrics suggest it is not justified given its lower return on capital employed of 6.22%. The stock has performed well in the short term, with a year-to-date return of 38.24%, significantly outpacing the Sensex's 6.50%. However, the overall valuation remains unsustainable, indicating that investors may want to exercise caution.