Is Godavari Drugs overvalued or undervalued?

As of 11 July 2025, the valuation grade for Godavari Drugs has moved from attractive to very attractive, indicating a strong improvement in its investment appeal. The company appears undervalued based on its current metrics, with a PE Ratio of 15.16, an EV to EBIT of 13.05, and an EV to EBITDA of 10.35. These ratios suggest that Godavari Drugs is trading at a lower valuation compared to its peers.
In comparison to its industry peers, Godavari Drugs stands out with a significantly lower PE Ratio than Sun Pharma (35.09) and Divi's Lab (82.88), both of which are classified as expensive. Additionally, its PEG Ratio of 0.00 further supports the undervaluation narrative, especially when contrasted with peers like Cipla (0.96) and Dr. Reddy's Labs (13.97), which are considered attractive. Despite recent stock performance trailing the Sensex, particularly with a year-to-date decline of 19.34% compared to the Sensex's gain of 5.58%, the underlying fundamentals suggest a strong potential for recovery and growth.