Vadilal Industries Ltd Valuation Shifts to Very Attractive Amid Market Volatility

Valuation Metrics Reflect Enhanced Price Appeal

Recent data reveals that Vadilal Industries’ P/E ratio currently stands at 29.55, a figure that, while higher than some peers, has improved sufficiently to upgrade its valuation grade from attractive to very attractive. The P/BV ratio is at 4.60, indicating a premium over book value but still within a range that investors find reasonable given the company’s growth prospects and return metrics.

Other valuation multiples include an EV to EBIT of 23.77 and EV to EBITDA of 18.33, both of which suggest a moderate premium relative to earnings before interest and taxes and earnings before interest, taxes, depreciation and amortisation. The EV to capital employed ratio is 4.34, and EV to sales is 2.70, underscoring a balanced valuation stance that factors in operational efficiency and revenue generation.

Notably, the PEG ratio is reported as 0.00, which may indicate either a lack of consensus on earnings growth estimates or a data anomaly; however, the company’s return on capital employed (ROCE) and return on equity (ROE) are robust at 20.29% and 17.11% respectively, signalling efficient capital utilisation and shareholder value creation.

Comparative Valuation: Vadilal vs FMCG Peers

When benchmarked against key FMCG peers, Vadilal Industries’ valuation stands out for its relative attractiveness. For instance, Gillette India trades at a P/E of 45.6 and EV to EBITDA of 31.07, categorised as very expensive. Similarly, Bikaji Foods commands a P/E of 64.79 and EV to EBITDA of 40.74, reflecting a significant premium.

Other companies such as AWL Agri Business and Godrej Agrovet are rated attractive with P/E ratios of 27.64 and 26.96 respectively, but their EV to EBITDA multiples are lower than Vadilal’s, at 12.50 and 16.74. Emami and Hatsun Agro fall into the fair valuation category, with P/E ratios of 26.63 and 52.18, and EV to EBITDA multiples of 20.75 and 18.60 respectively.

This comparative framework highlights Vadilal’s valuation as very attractive, especially considering its strong operational returns and growth trajectory, which may justify a premium over some peers but still offer value relative to the broader FMCG sector.

Stock Performance Outpaces Market Benchmarks

Vadilal Industries’ stock price currently trades at ₹5,026.05, down 3.17% on the day from a previous close of ₹5,190.60. The 52-week trading range spans from ₹3,496.05 to ₹7,398.95, indicating significant volatility but also substantial upside potential over the past year.

Examining returns relative to the Sensex reveals a compelling growth story. Over the past one year, Vadilal has delivered a 38.34% return compared to the Sensex’s 9.81%. Over three and five years, the stock has outperformed dramatically, with returns of 97.41% and 477.04% respectively, dwarfing the Sensex’s 36.80% and 61.40% gains. The ten-year return is particularly striking at 998.59%, compared to the Sensex’s 256.90%.

Shorter-term performance also shows resilience, with a one-month return of 11.44% versus a slight decline in the Sensex of 0.14%, and a year-to-date gain of 1.92% against the Sensex’s negative 2.08%. These figures underscore Vadilal’s ability to generate alpha in both bullish and challenging market environments.

Mojo Score and Grade Reflect Cautious Sentiment

Despite the improved valuation attractiveness, Vadilal Industries holds a Mojo Score of 34.0 and a Mojo Grade of Sell, upgraded from a previous Strong Sell on 11 February 2026. This suggests that while valuation metrics have become more favourable, other factors such as market volatility, sector headwinds, or company-specific risks temper the overall outlook.

The market capitalisation grade is low at 3, indicating a relatively smaller market cap compared to larger FMCG peers, which may contribute to liquidity concerns or higher volatility. Investors should weigh these considerations alongside valuation improvements when assessing the stock’s suitability for their portfolios.

Contextualising Valuation in FMCG Sector Dynamics

The FMCG sector continues to face a complex environment marked by inflationary pressures, shifting consumer preferences, and supply chain challenges. Within this context, companies with strong brand equity, efficient capital deployment, and consistent earnings growth command premium valuations.

Vadilal Industries’ ROCE of 20.29% and ROE of 17.11% place it favourably among peers, signalling effective management and profitability. The dividend yield of 0.42% is modest but consistent, reflecting a balanced approach to shareholder returns and reinvestment for growth.

Its EV to sales ratio of 2.70 is moderate, suggesting that the market values the company’s revenue generation capacity reasonably. This is important in a sector where top-line growth often drives investor sentiment.

While some FMCG companies trade at elevated multiples due to brand dominance or niche positioning, Vadilal’s valuation appears to offer a compelling entry point for investors seeking exposure to the sector without paying excessive premiums.

Investment Implications and Outlook

For investors, the shift in Vadilal Industries’ valuation grade to very attractive signals a potential opportunity to capitalise on improved price levels relative to earnings and book value. The stock’s historical outperformance against the Sensex and solid return ratios support a cautiously optimistic view.

However, the current Mojo Grade of Sell and the recent downgrade from Strong Sell indicate that risks remain, including market volatility and sector-specific headwinds. Prospective investors should consider these factors alongside valuation metrics and monitor ongoing company developments and sector trends.

In summary, Vadilal Industries presents a nuanced investment case: valuation parameters have improved markedly, enhancing price attractiveness, yet caution is warranted given the broader market and company-specific signals.

Summary of Key Valuation and Performance Metrics

• P/E Ratio: 29.55 (Very Attractive)
• Price to Book Value: 4.60
• EV to EBIT: 23.77
• EV to EBITDA: 18.33
• ROCE: 20.29%
• ROE: 17.11%
• Dividend Yield: 0.42%
• Mojo Score: 34.0 (Sell)
• 1-Year Stock Return: 38.34% vs Sensex 9.81%
• 5-Year Stock Return: 477.04% vs Sensex 61.40%

Investors should continue to monitor valuation trends and peer comparisons as Vadilal Industries navigates the evolving FMCG landscape.

Unlock special upgrade rates for a limited period. Start Saving Now →