Is Godfrey Phillips overvalued or undervalued?

As of 16 September 2025, the valuation grade for Godfrey Phillips has moved from very expensive to expensive, indicating a slight shift in perception. The company is currently considered overvalued. Key ratios include a PE Ratio of 31.31, an EV to EBITDA of 30.59, and a PEG Ratio of 0.31, which suggests that while growth expectations are high, the price may not justify the earnings growth potential.
In comparison to its peers, Godfrey Phillips has a significantly higher PE Ratio than ITC at 21.89 and VST Industries at 21.91, both of which are also categorized as expensive. Additionally, the company's ROE stands at a strong 21.58%, but this is overshadowed by the high valuation multiples. Notably, Godfrey Phillips has outperformed the Sensex with a year-to-date return of 111.64% compared to the Sensex's 5.43%, yet this performance does not alter the valuation conclusion that the stock is overvalued.