Is Patanjali Foods overvalued or undervalued?

As of 22 July 2025, the valuation grade for Patanjali Foods has moved from very expensive to expensive. The company is currently considered overvalued based on its high valuation ratios, including a PE ratio of 54.03, an EV to EBITDA ratio of 36.64, and a Price to Book Value of 6.18. These figures suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Patanjali Foods has a lower PEG ratio of 0.77 than Hindustan Unilever's 39.38 and Nestle India's 0.00, indicating a more favorable growth expectation relative to its price. However, its PE ratio is still higher than Britannia Industries, which stands at 62.6, and Dabur India at 51.7, both categorized as expensive. Despite the overvaluation, Patanjali Foods has outperformed the Sensex in various timeframes, including a 20.95% return over the past year versus the Sensex's 2.09%, reinforcing its strong market performance.