Is Lupin overvalued or undervalued?

As of 1 July 2025, Lupin's valuation grade has moved from attractive to very attractive, indicating a significant improvement in its perceived value. The company is currently considered undervalued based on its financial metrics. Key ratios include a PE ratio of 27.39, an EV to EBITDA of 17.33, and a PEG ratio of 0.39, which suggests strong growth potential relative to its price.
In comparison to its peers, Lupin stands out favorably; for instance, Sun Pharma has a PE ratio of 34.98, categorizing it as expensive, while Dr. Reddy's Labs is rated attractive with a PE of 18.85. Additionally, Lupin's ROCE of 22.16% and ROE of 19.08% further reinforce its strong operational performance. Despite a recent underperformance relative to the Sensex year-to-date, where Lupin is down 16.29% compared to the Sensex's 7.11% gain, its long-term growth trajectory remains promising, making it an appealing investment opportunity.