Is SMS Pharma. overvalued or undervalued?
As of August 29, 2025, SMS Pharma is fairly valued with a PE ratio of 28.63 and has underperformed the market with a 30.21% decline over the past year, raising concerns about its future growth prospects despite competitive ROCE of 11.52%.
As of 29 August 2025, SMS Pharma's valuation grade has moved from attractive to fair, indicating a shift in market perception. The company is currently fairly valued, with a PE ratio of 28.63, an EV to EBITDA of 16.32, and a PEG ratio of 1.27. Compared to its peers, SMS Pharma's valuation appears more reasonable, especially when contrasted with Sun Pharma, which has a PE ratio of 33.34, and Divi's Lab, which is significantly more expensive with a PE of 70.28.In terms of performance, SMS Pharma has shown a decline of 30.21% over the past year, while the Sensex has only decreased by 2.83%, suggesting that the stock may have been overreacted to in the market. The company's return on capital employed (ROCE) stands at 11.52%, which is competitive within the sector. Overall, while SMS Pharma is fairly valued at present, its recent stock performance relative to the broader market raises questions about its future growth prospects.
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