Is Source Natural overvalued or undervalued?

As of 27 June 2025, the valuation grade for Source Natural has moved from fair to attractive, indicating a positive shift in its perceived value. The company appears to be undervalued based on its current metrics. Key ratios include a PE Ratio of 35.12, an EV to EBITDA of 19.53, and a PEG Ratio of 0.53, which suggests that the stock is priced favorably relative to its growth prospects.
In comparison to its peers, Source Natural's PE Ratio is slightly lower than Sun Pharma's at 35.42, while Cipla presents a more attractive PE of 23.02. This positioning, along with a robust ROCE of 23.03% and ROE of 14.04%, reinforces the notion that Source Natural is undervalued in the current market. Despite recent underperformance relative to the Sensex over the past month and year, the long-term returns of 76.39% over three years and 156.05% over five years highlight its potential for growth.