Is Laurus Labs overvalued or undervalued?

As of 14 July 2025, Laurus Labs has moved from expensive to very expensive in its valuation grade. The company is currently overvalued, with a PE ratio of 124.11, a Price to Book Value of 9.94, and an EV to EBITDA ratio of 44.62. These ratios significantly exceed those of its peers, such as Sun Pharma with a PE of 35.28 and Divi's Lab at 82.27, indicating a stark contrast in valuation.
The company's return metrics also reflect its overvaluation, with a ROCE of 8.82% and a ROE of 8.01%, which are not compelling enough to justify its high price. While Laurus Labs has outperformed the Sensex in recent periods, including a 78.3% return over the past year compared to the Sensex's 2.15%, this performance does not mitigate its current overvaluation status.