Is United Spirits overvalued or undervalued?

As of 8 August 2025, the valuation grade for United Spirits has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently overvalued, as evidenced by its high PE ratio of 57.65, an EV to EBITDA of 40.75, and a PEG ratio of 3.95. These figures suggest that the stock is trading at a premium compared to its earnings growth potential.
In comparison to its peers, United Spirits' valuation metrics are notably high. Varun Beverages has a PE ratio of 58.73 and an EV to EBITDA of 33.49, while United Breweries shows an even higher PE ratio of 108.55 and an EV to EBITDA of 58.87. This places United Spirits in a challenging position within its industry, where even its closest competitors exhibit lower valuations. Additionally, the company's recent stock performance has lagged behind the Sensex, with a year-to-date return of -20.64% compared to the Sensex's positive return of 2.20%.