Is Laurus Labs overvalued or undervalued?

As of 16 July 2025, Laurus Labs has moved from a valuation grade of very expensive to expensive. The company is currently considered overvalued based on its high valuation ratios, including a PE ratio of 123.72, a Price to Book Value of 9.91, and an EV to EBITDA of 44.49. These figures indicate that Laurus Labs is trading at a significant premium compared to its peers.
In comparison to its industry peers, Laurus Labs' PE ratio is substantially higher than Sun Pharma's 35.71 and Cipla's 22.58, both of which are classified as expensive and attractive, respectively. Additionally, the PEG ratio of Laurus Labs stands at 1.01, which is lower than the PEG of Divi's Lab at 2.24, suggesting that while Laurus Labs may have growth potential, its current valuation does not align with its earnings growth prospects. Notably, Laurus Labs has outperformed the Sensex with a year-to-date return of 36.4%, compared to the Sensex's 5.75%, but this strong performance does not mitigate the overvaluation concern.