Is Zenith Drugs overvalued or undervalued?

As of 26 August 2025, the valuation grade for Zenith Drugs has moved from expensive to fair, indicating a more favorable assessment of its market position. The company is currently fairly valued, with a price-to-earnings (PE) ratio of 16.51, a price-to-book value of 1.90, and an EV to EBITDA ratio of 9.83. These ratios suggest that Zenith Drugs is competitively positioned within its industry.
In comparison to its peers, Zenith Drugs stands out with a PE ratio of 16.51, significantly lower than Sun Pharma's 33.48 and Divi's Lab's 71.33, both of which are considered expensive. Additionally, its EV to EBITDA ratio of 9.83 is more attractive compared to the industry average, further reinforcing its fair valuation status. Despite a challenging year with a year-to-date return of -14.67% compared to the Sensex's 4.51%, the company's current valuation metrics suggest it is not overvalued and may present a reasonable investment opportunity in the pharmaceuticals and biotechnology sector.