Is Vaidya Sane overvalued or undervalued?

As of 29 August 2025, the valuation grade for Vaidya Sane has moved from very expensive to expensive. The company is currently considered overvalued based on its high valuation ratios. The PE ratio stands at 51.68, while the EV to EBITDA ratio is 27.71, and the PEG ratio is notably low at 0.12, indicating a potential disconnect between growth expectations and current pricing.
In comparison to its peers, Vaidya Sane's PE ratio is significantly higher than Sun Pharma's 33.34 and Cipla's 23.82, both of which are in the same industry. Additionally, while Vaidya Sane has a ROCE of 25.54% and ROE of 13.84%, these figures do not sufficiently justify its premium valuation when compared to peers like Dr. Reddy's Labs, which is trading at a more attractive valuation with a PE of 18.56. Despite strong recent stock performance, including a 104.22% YTD return compared to the Sensex's 3.31%, the current valuation suggests that Vaidya Sane may be overvalued in the market.