Is Dwarikesh Sugar overvalued or undervalued?

As of 3 November 2025, Dwarikesh Sugar's valuation grade has moved from very attractive to fair, indicating a shift in its market perception. The company is currently fairly valued, with a PE ratio of 52.58, a Price to Book Value of 0.10, and a PEG ratio of 0.03. In comparison, peers such as EID Parry and Balrampur Chini have PE ratios of 24.3 and 22.19, respectively, suggesting that Dwarikesh Sugar is trading at a significant premium relative to its industry counterparts.
Despite the fair valuation, the company's financial metrics reveal notable concerns, including negative EV to EBIT and EV to EBITDA ratios of -21.06 and -10.49, respectively. Furthermore, the company's recent stock performance has been underwhelming, with a year-to-date return of -23.78%, contrasting sharply with the Sensex's gain of 7.47% over the same period. This underperformance, coupled with high valuation ratios, suggests that while the company is currently fairly valued, it may face challenges in justifying its premium in the near future.