Is Source Natural overvalued or undervalued?

As of 31 October 2025, the valuation grade for Source Natural has moved from fair to attractive, indicating a positive shift in its perceived worth. The company is currently considered undervalued. Key ratios include a PE ratio of 29.87, an EV to EBITDA of 16.92, and a PEG ratio of 0.47, which suggests that the stock is priced favorably relative to its growth potential.
In comparison to its peers, Source Natural's PE ratio is lower than Sun Pharma's 35.35 and Divi's Lab's 77.85, both of which are classified as expensive. Additionally, Source Natural's EV to EBITDA ratio of 16.92 is more attractive than that of Cipla at 5.55, which is also rated as attractive. Despite recent underperformance against the Sensex, with a year-to-date return of -24.97% compared to the Sensex's 7.42%, the company's strong ratios and improved valuation grade support its status as an undervalued asset in the pharmaceuticals and biotechnology sector.