Is Dr Lal Pathlabs overvalued or undervalued?

Jun 09 2025 04:05 PM IST
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As of March 21, 2024, Dr. Lal Pathlabs is considered very expensive and overvalued with a PE ratio of 48.96, despite being more attractive than some competitors like Max Healthcare and Apollo Hospitals, but its growth potential is questionable given a PEG ratio of 1.36 and a low dividend yield of 1.05%.
As of 21 March 2024, the valuation grade for Dr. Lal Pathlabs has moved from expensive to very expensive, indicating a significant shift in its market positioning. The company is currently deemed overvalued. Key ratios include a PE ratio of 48.96, an EV to EBITDA of 32.84, and a Price to Book Value of 10.98, all of which suggest a premium valuation compared to its peers.

In comparison, Max Healthcare has a PE ratio of 100.29, while Apollo Hospitals stands at 69.03, illustrating that Dr. Lal Pathlabs, despite its high valuation, is still more attractive than some competitors. However, with a PEG ratio of 1.36 and a dividend yield of only 1.05%, the stock's growth potential does not justify its current price. Recent performance shows that while Dr. Lal Pathlabs has outperformed the Sensex over the past week and month, it lags behind in the year-to-date and one-year returns, reinforcing the notion that it may be overvalued in the current market context.
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