Is Zydus Wellness overvalued or undervalued?

As of 26 September 2025, Zydus Wellness has moved from a fair to an expensive valuation grade. The company is currently overvalued based on its financial ratios, with a PE ratio of 47.60, an EV to EBITDA of 40.53, and a PEG ratio of 8.18. These figures indicate that the stock is priced significantly higher relative to its earnings growth potential.
In comparison to its peers, Zydus Wellness has a lower PE ratio than Hindustan Unilever's 55.46 and Nestle India's 74.54, but still remains in the expensive category. Other competitors like Britannia Industries and Marico also exhibit high valuations, with PE ratios of 65.2 and 54.3, respectively. Despite Zydus Wellness's recent stock performance showing a 23.97% year-to-date return compared to a 2.93% return for the Sensex, the overall valuation suggests that investors may be paying a premium that is not justified by the company's financial metrics.