Is Orchid Pharma overvalued or undervalued?

As of 21 July 2025, Orchid Pharma's valuation grade has moved from very expensive to expensive, indicating a slight improvement in its relative valuation. Despite this change, the company appears to be overvalued based on its current financial metrics. The PE ratio stands at 36.74, while the EV to EBITDA ratio is 31.21, both of which are significantly higher than many of its peers. Additionally, the PEG ratio of 4.17 suggests that the stock may be priced too high relative to its growth prospects.
In comparison to its peers, Sun Pharma has a PE of 35.52 and an EV to EBITDA of 25.11, while Cipla shows a more attractive valuation with a PE of 22.6 and an EV to EBITDA of 15.65. These comparisons highlight that Orchid Pharma's valuation is not justified when considering its earnings and growth potential. Furthermore, the company's year-to-date return of -60.27% starkly contrasts with the Sensex's gain of 5.20%, reinforcing the notion that Orchid Pharma is currently overvalued.