Is Orchid Pharma overvalued or undervalued?

As of 15 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, as reflected by its high PE ratio of 37.66, an EV to EBIT ratio of 45.36, and a PEG ratio of 4.27. These figures suggest that the stock is trading at a premium compared to its earnings growth potential.
In comparison to its peers, Orchid Pharma's valuation metrics stand out unfavorably. For instance, Sun Pharma has a PE ratio of 36.25 and an EV to EBITDA of 25.66, while Cipla is more attractively valued with a PE of 22.85 and an EV to EBITDA of 15.83. Additionally, despite a recent positive performance with a 1-week return of 1.71% compared to a -1.36% return for the Sensex, the long-term outlook remains concerning, with a year-to-date decline of 59.28% against a 5.67% gain for the index.