Is Fermenta Biotec. overvalued or undervalued?

As of 1 October 2025, the valuation grade for Fermenta Biotec has moved from attractive to very attractive, indicating a strong improvement in its investment appeal. The company is currently assessed as undervalued, supported by a PE ratio of 9.21, an EV to EBITDA of 7.33, and a PEG ratio of 0.02, which suggests significant growth potential relative to its price.
In comparison to its peers, Fermenta Biotec's valuation metrics stand out; for instance, Sun Pharma has a PE ratio of 34.22 and an EV to EBITDA of 23.17, while Cipla shows a PE of 22.63 and an EV to EBITDA of 15.9, both indicating higher valuations than Fermenta. Notably, Fermenta's ROCE and ROE are strong at 21.08% and 21.19%, respectively, further reinforcing its undervalued status. Despite a recent decline in stock performance compared to the Sensex, with a YTD return of -10.15% versus the Sensex's 3.64%, the long-term outlook remains positive, evidenced by a 3-year return of 57.86%.