Is Godrej Consumer overvalued or undervalued?

As of 21 March 2025, Godrej Consumer's valuation grade has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently assessed as overvalued. Key ratios include a PE ratio of 65.35, an EV to EBITDA of 41.43, and a Price to Book Value of 10.32, all of which are considerably higher than industry norms.
In comparison with peers, Hindustan Unilever has a PE ratio of 53.88 and an EV to EBITDA of 37.14, while Nestle India shows a PE of 75.2 and an EV to EBITDA of 49.57, further illustrating the high valuation of Godrej Consumer relative to its competitors. Notably, Godrej Consumer's recent stock performance has lagged behind the Sensex, with a 1-year return of -14.65% compared to the Sensex's 7.65%, reinforcing the notion of its overvaluation in the current market context.