Is Laurus Labs overvalued or undervalued?

As of 26 September 2025, Laurus Labs has moved from a valuation grade of very expensive to expensive. The company appears to be overvalued at its current price of 832.70, given its high PE ratio of 88.34, a Price to Book Value of 10.05, and an EV to EBITDA ratio of 37.57. These ratios indicate that the stock is trading at a premium relative to its earnings and book value.
In comparison to its peers, Laurus Labs' PE ratio significantly exceeds that of Sun Pharma, which stands at 33.18, and Divi's Lab at 65.51, both of which are also considered expensive. Notably, companies like Cipla and Dr. Reddy's Labs, which are classified as attractive, have much lower PE ratios of 22.45 and 18.4, respectively. Despite a strong year-to-date return of 38.24% compared to the Sensex's 2.93%, the current valuation metrics suggest that Laurus Labs may not justify its price in the current market environment.