Is Umang Dairies overvalued or undervalued?

As of 8 January 2025, the valuation grade for Umang Dairies has moved from very expensive to expensive, indicating a slight improvement in perceived value. The company is currently considered overvalued based on its high valuation ratios, including a PE ratio of 194.95, an EV to EBIT of 104.16, and an EV to EBITDA of 34.56. These figures suggest that the stock is trading at a significant premium compared to its earnings and cash flow generation capabilities.
In comparison to its peers, Umang Dairies' PE ratio is substantially higher than that of Hindustan Unilever at 53.88 and Britannia Industries at 61.44, both of which are also categorized as expensive. Additionally, the PEG ratio of Umang Dairies stands at 0.00, indicating a lack of growth expectations reflected in its price. While the stock has outperformed the Sensex over the past week and month, it has underperformed year-to-date and over the longer term, reinforcing the view that the current valuation may not be justified given its financial metrics.