Is Zenith Drugs overvalued or undervalued?

Nov 19 2025 08:11 AM IST
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As of November 18, 2025, Zenith Drugs is considered overvalued at a price of 57.35, with a PE ratio of 13.74 and a significant underperformance of -39.05% compared to the Sensex, especially when compared to its peers like Sun Pharma and Divi's Lab, which have much higher PE ratios.
As of 18 November 2025, Zenith Drugs has moved from a fair to an expensive valuation grade. The company appears to be overvalued at its current price of 57.35, especially when considering its PE ratio of 13.74, EV to EBIT of 14.11, and ROE of 9.98%. These metrics indicate that the stock is trading at a premium compared to its earnings and book value.

In comparison to its peers, Zenith Drugs' PE ratio is significantly lower than that of Sun Pharma (36.56) and Divi's Lab (69.17), which are both categorized as expensive to very expensive. Meanwhile, Cipla (22.49) and Dr. Reddy's Labs (17.97), which are rated attractive, have more favorable valuations. Additionally, Zenith Drugs has underperformed the Sensex significantly over the past year, with a stock return of -39.05% compared to the Sensex's 10.47%, reinforcing the notion that the stock is currently overvalued.
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