Is Kilitch Drugs overvalued or undervalued?

As of 15 July 2025, the valuation grade for Kilitch Drugs has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently considered overvalued. Key ratios include a PE ratio of 32.38, an EV to EBITDA of 27.10, and a PEG ratio of 0.49, which suggests that while growth expectations may be high, the current price does not justify the valuation relative to its earnings growth potential.
In comparison to its peers, Kilitch Drugs' PE ratio is lower than Sun Pharma's 36.25 but significantly higher than Cipla's attractive PE of 22.85. The EV to EBITDA ratio also places Kilitch above the industry average, with competitors like Dr. Reddy's Labs showing a more favorable ratio of 12.27. Despite its recent strong stock performance, with a year-to-date return of 50.96% compared to the Sensex's 5.67%, the valuation metrics suggest that Kilitch Drugs may not sustain its current price levels in the long term.