Is Godfrey Phillips overvalued or undervalued?

As of 27 June 2025, the valuation grade for Godfrey Phillips has moved from expensive to very expensive, indicating a significant shift in its market perception. The company appears to be overvalued based on its current metrics, with a PE ratio of 41.46, an EV to EBITDA ratio of 40.27, and a Price to Book Value of 8.97. These ratios suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Godfrey Phillips stands out with a notably higher PE ratio than ITC at 22.32 and VST Industries at 24.18, both of which are categorized as expensive. The PEG ratio of 1.51 further emphasizes the overvaluation when compared to NTC Industries, which is very attractive with a PEG of 1.30. Additionally, while Godfrey Phillips has delivered impressive returns, outperforming the Sensex significantly over various time frames, the current valuation metrics suggest that investors may be paying too much for future growth potential.