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 is currently considered overvalued. Key ratios include a PE ratio of 41.46, an EV to EBITDA of 40.27, and a Price to Book Value of 8.97, all of which are substantially higher than its peers. For instance, ITC has a PE ratio of 22.32 and an EV to EBITDA of 19.26, while VST Industries shows a PE of 24.18 and an EV to EBITDA of 16.76, highlighting the premium Godfrey Phillips commands in the market.
In addition, the company has demonstrated strong returns, with a year-to-date stock return of 73.44%, significantly outperforming the Sensex's 7.58% during the same period. However, despite these impressive returns, the elevated valuation metrics suggest that investors may be paying too much for future growth, reinforcing the conclusion that Godfrey Phillips is overvalued in its current state.