Is Source Natural overvalued or undervalued?

As of 30 October 2025, the valuation grade for Source Natural has moved from attractive to fair, indicating a shift in its perceived value. The company is currently fairly valued based on its financial metrics. The PE ratio stands at 32.08, the EV to EBITDA ratio is 18.17, and the ROCE is a robust 19.92%.
In comparison to its peers, Source Natural's PE ratio is lower than that of Sun Pharma, which is considered expensive at 35.63, and significantly lower than Divi's Lab, which is very expensive at 76.52. On the other hand, Cipla, which is rated attractive, has a PE ratio of 22.87, suggesting that Source Natural is positioned in the middle of the valuation spectrum among its peers. Despite recent stock performance showing a decline year-to-date of 19.43% compared to a Sensex return of 8.02%, the company's fair valuation reflects a more balanced perspective on its current market position.