Is Zydus Wellness overvalued or undervalued?

As of 29 September 2025, Zydus Wellness has moved from an expensive to a fair valuation grade. The company is currently fairly valued, with a PE ratio of 47.22, an EV to EBITDA ratio of 40.21, and a PEG ratio of 8.12. In comparison to its peers, Zydus Wellness maintains a more reasonable valuation than Hindustan Unilever, which has a PE of 55.2, and Nestle India, which has a PE of 73.98, both categorized as very expensive.
Despite its fair valuation, Zydus Wellness has shown strong performance with a year-to-date return of 23.00%, significantly outperforming the Sensex's 2.85% during the same period. However, it is important to note that the company’s dividend yield is relatively low at 0.25%, and its ROE and ROCE are also modest at 6.02% and 6.11%, respectively. Overall, Zydus Wellness appears to be a stable investment within the FMCG sector, reflecting a balanced risk-reward profile compared to its peers.