Pharma stocks with a PEG ratio below 1 are often considered undervalued. PEG ratio is calculated by dividing the price-to-earnings (P/E) ratio by the company’s earnings growth rate.
A low PEG ratio suggests a stock may have strong growth potential at a reasonable price. Watching these stocks can help identify opportunities in the pharmaceutical sector.
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Lupin
On October 10, 2025, Lupin Ltd opened at ₹1,957.50, up 0.02% from its previous close of ₹1,957.45. The stock reached a high of ₹1,984.00 and a low of ₹1,932.30. By 1:43 PM, it traded at ₹1,964.80, a 0.38% increase, with a market cap of ₹89,743.79 crore.
Lupin Ltd’s PEG ratio of 0.40 suggests undervaluation, while its stock P/E of 24.2 reflects current market price versus earnings.
Lupin Ltd (NSE: LUPIN) is a Mumbai-based pharmaceutical company specializing in branded and generic formulations, biotechnology products, and APIs, serving over 100 markets across the U.S., India, Europe, APAC, LATAM, and the Middle East.
Dr Reddys Laboratories
On October 10, 2025, Dr Reddys Laboratories Ltd opened at ₹1,246.60, up 0.09% from its previous close of ₹1,245.65. The stock reached a high of ₹1,267.45 and a low of ₹1,245.00. By 1:44 PM, it traded at ₹1,262.20, a 1.33% increase, with a market cap of ₹1,05,340.02 crore.
Dr Reddys Laboratories Ltd has a PEG ratio of 0.48, indicating potential undervaluation, with a stock P/E of 18.3.
Dr Reddys Laboratories Ltd (NSE: DRREDDY) is a leading Indian pharmaceutical company providing APIs, generics, biosimilars, differentiated formulations, and custom pharmaceutical services, serving domestic and international markets with innovative healthcare solutions.
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Cipla
On October 10, 2025, Cipla Ltd opened at ₹1,514.00, up 0.10% from its previous close of ₹1,512.55. The stock reached a high of ₹1,560.65 and a low of ₹1,508.00. By 1:46 PM, it traded at ₹1,555.00, a 2.81% increase, with a market cap of ₹1,25,607.57 crore.
Cipla Ltd has a PEG ratio of 0.88, suggesting reasonable valuation, with a stock P/E of 22.7 reflecting earnings relative to price.
Cipla Ltd (NSE: CIPLA) is a leading Indian pharmaceutical company, strong in generics and respiratory care, with significant domestic and North American presence, extensive physician reach, and a robust digital and field-force network.
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Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.
FAQs
Q: Which 3 pharma stocks have a PEG ratio below 1 to keep an eye on?
A: Lupin Ltd, Dr Reddys Laboratories Ltd, and Cipla Ltd have PEG ratios below 1, indicating potential undervaluation.
Q: What does a PEG ratio below 1 signify for pharma stocks?
A: A PEG ratio below 1 suggests the stock may be undervalued relative to its earnings growth potential.
Q: Why should these pharma stocks with low PEG ratios be monitored?
A: Low PEG ratios indicate potential growth at reasonable prices, making these pharma stocks attractive for tracking market performance.
