Is SMS Pharma. overvalued or undervalued?

As of 28 August 2025, the valuation grade for SMS Pharma has moved from fair to attractive, indicating a positive shift in its perceived value. The company is currently considered undervalued based on its financial metrics. Key ratios include a PE ratio of 27.39, an EV to EBITDA of 15.69, and a PEG ratio of 1.21, which suggest that SMS Pharma is positioned favorably compared to its peers.
In the peer comparison, SMS Pharma's PE ratio is lower than that of Sun Pharma (33.18) and Divi's Lab (70.66), both of which are classified as expensive, while it is on par with Cipla's attractive valuation of 23.65. Additionally, SMS Pharma's EV to EBITDA is also more favorable than that of its peers like Torrent Pharma (32.05) and Mankind Pharma (31.26), which are deemed very expensive. Despite recent underperformance against the Sensex, particularly over the past year with a decline of 34.08% compared to a 2.08% drop in the index, the long-term growth potential remains strong, as evidenced by a 180.22% return over three years.