Is Source Natural overvalued or undervalued?

As of 7 November 2025, the valuation grade for Source Natural has moved from attractive to fair. The company is currently fairly valued based on its financial metrics. Key ratios include a PE ratio of 29.64, an EV to EBITDA of 16.78, and a PEG ratio of 0.46, which suggests that while the stock is not undervalued, it is also not significantly overvalued compared to its peers.
In comparison to its industry peers, Source Natural's PE ratio is lower than Sun Pharma's 35.17 and Divi's Lab's 71.11, both of which are considered expensive. Conversely, it is higher than Cipla's attractive PE of 22.33, indicating a mixed valuation landscape. Additionally, Source Natural's recent stock performance has lagged behind the Sensex, particularly over the past year, where it has seen a decline of 41.04% compared to the Sensex's gain of 4.62%. This underperformance may reflect the fair valuation status, suggesting that while the stock is not a bargain, it may still offer some potential for recovery.