Is Orchid Pharma overvalued or undervalued?

As of 1 July 2025, Orchid Pharma's valuation grade has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently overvalued, with a PE ratio of 37.66, an EV to EBITDA ratio of 31.99, and a PEG ratio of 4.27, all of which suggest that the stock is priced well above its earnings growth potential.
In comparison to its peers, Sun Pharma has a PE ratio of 34.98 and an EV to EBITDA of 24.71, while Cipla stands out with a more attractive valuation, showing a PE ratio of 23.21 and an EV to EBITDA of 16.09. This stark contrast highlights Orchid Pharma's overvaluation relative to its industry peers. Additionally, despite recent stock performance showing a 6.11% return over the past week compared to a 2.00% return for the Sensex, the long-term outlook remains concerning, with a year-to-date decline of 59.28% against the Sensex's 7.11% increase.