Is Modern Dairies overvalued or undervalued?

As of 18 November 2025, the valuation grade for Modern Dairies has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued based on its financial ratios, including a PE ratio of 5.32, an EV to EBITDA of 12.13, and a ROE of 53.13%. These figures suggest that while the company has a strong return on equity, its valuation metrics are not competitive when compared to peers.
In the peer comparison, Modern Dairies' PE ratio of 5.32 is significantly lower than that of Hindustan Unilever, which stands at 53.39, and Nestle India at 81.48, both categorized as very expensive. Additionally, the EV to EBITDA ratio of 12.13 for Modern Dairies is lower than the industry average, yet the overall valuation remains high relative to its earnings potential. Despite the recent stock performance showing a 14.65% return over the past week compared to a mere 0.96% for the Sensex, the long-term outlook indicates that Modern Dairies is currently overvalued in the FMCG sector.