Is Dr Reddy's Labs overvalued or undervalued?

As of 15 April 2025, Dr Reddy's Labs has moved from a very attractive to an attractive valuation grade. The company is currently fairly valued based on its financial metrics. The PE ratio stands at 19.49, the EV to EBITDA ratio is 12.87, and the ROE is 16.86%, indicating a solid performance relative to its peers.
In comparison to its industry peers, Dr Reddy's Labs appears more reasonably priced than Sun Pharma, which has a PE ratio of 35.25, and Divi's Lab, which is significantly more expensive at a PE of 79.33. Other peers like Cipla and Zydus Lifesciences are also attractive with PE ratios of 22.99 and 20.61, respectively. Notably, Dr Reddy's Labs has outperformed the Sensex over the past week and month, with returns of 5.88% and 14.36%, respectively, reinforcing its competitive position in the market.