Is Godfrey Phillips overvalued or undervalued?

As of 17 September 2025, the valuation grade for Godfrey Phillips has moved from expensive to very expensive, indicating a significant increase in perceived valuation. The company is currently considered overvalued. Key ratios include a PE ratio of 45.97, an EV to EBITDA ratio of 44.93, and a Price to Book Value of 10.62, all of which are substantially higher than industry peers. For instance, ITC has a PE ratio of 21.68 and an EV to EBITDA of 18.77, while VST Industries shows a PE of 21.89 and an EV to EBITDA of 15.06, highlighting the premium Godfrey Phillips commands in comparison.
Despite strong returns, with a year-to-date increase of 107.45% compared to the Sensex's 5.83%, the elevated valuation metrics suggest that the stock may not sustain its current price levels. The PEG ratio of 1.34 further reinforces the notion that the stock is priced for growth that may not be achievable, making it a risky investment at this stage.