Is Laurus Labs overvalued or undervalued?

As of 18 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 124.55, a Price to Book Value of 9.98, and an EV to EBITDA ratio of 44.77. These metrics indicate a significant premium compared to its peers, such as Sun Pharma with a PE of 35.49 and Divi's Lab at 81.36, both of which are categorized as expensive or very expensive.
In addition to the high valuation ratios, Laurus Labs' ROCE stands at 8.82% and ROE at 8.01%, which are relatively low compared to the elevated market expectations reflected in its stock price. The company's recent performance has been strong, with a 1-year stock return of 81.39% compared to a mere 0.51% for the Sensex, further emphasizing the disconnect between its current valuation and underlying financial metrics.