Sorghum is a pivotal crop for food security in arid and semi-arid regions, renowned for its resilience to biotic and abiotic stresses. However, drought stress under post rainy conditions significantly reduces yield by impairing sorghums physiology and developmental dynamics. This underscores the critical need to identify drought-tolerant germplasm to ensure sustainable production. In this study a diversity panel of 156 germplasm were subjected to induced drought under laboratory and field conditions. The analysis of variance indicated highly significant variability among the genotypes under both in vitro and field conditions, across both stress and controlled environments. Polyethylene glycol treatment notably reduced seedling traits, however, genotypes such as SVD-1528R, SPV 2831, and RSLG-2386 exhibited minimal reduction, indicating superior early-stage drought tolerance and enhanced crop establishment. Similarly, under field evaluation most of the traits showed general decline under stress, except for water use efficiency, which increased under stress. Variability estimates indicated a high degree of genetic variation and an additive nature for most traits, signifying selection would be an effective strategy to improve these traits for enhancing drought tolerance. Correlation analysis revealed that absolute yield under moisture stress is a reliable indicator of relative drought tolerance. Furthermore, correlation and principal component analyses identified key physiological traits-photosynthetic rate, transpiration efficiency, chlorophyll content, and relative water content-as crucial determinants of drought adaptation. Genotypes were classified based on stress tolerance index, and identified drought-tolerant lines represent promising candidates for breeding programs aimed at developing sorghum varieties adapted to moisture stress environments.