Is Source Natural overvalued or undervalued?

As of 29 August 2025, the valuation grade for Source Natural has moved from fair to attractive, indicating a positive shift in its perceived value. The company is currently considered undervalued, especially in comparison to its peers. Key ratios include a PE ratio of 28.13, an EV to EBITDA of 15.68, and a PEG ratio of 0.44, which suggests that the stock is priced favorably relative to its growth prospects.
In the peer comparison, Source Natural's PE ratio is lower than that of Sun Pharma at 33.34 and Divi's Lab at 70.28, both classified as expensive. Additionally, Source Natural's EV to EBITDA is more competitive than that of peers like Mankind Pharma, which has an EV to EBITDA of 31.23. Despite a challenging year-to-date return of -29.35% compared to the Sensex's 2.14%, the company's strong ROCE of 23.03% and ROE of 15.06% reinforce its attractive valuation.