Is Aavas Financiers overvalued or undervalued?

Oct 03 2025 08:10 AM IST
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As of October 1, 2025, Aavas Financiers is considered overvalued with a PE ratio of 26.36 and an EV to EBITDA of 15.86, significantly higher than peers like HUDCO and LIC Housing Finance, and has underperformed the Sensex with a 1-year return of -11.24%.
As of 1 October 2025, Aavas Financiers has moved from a valuation grade of very expensive to expensive. The company is currently considered overvalued based on its key financial ratios. The PE ratio stands at 26.36, while the EV to EBITDA ratio is 15.86, and the PEG ratio is 1.67, indicating a premium valuation compared to its peers.

In comparison with notable peers, HUDCO has a PE ratio of 16.73 and an EV to EBITDA of 13.92, while LIC Housing Finance shows a much lower PE of 5.76 and an EV to EBITDA of 11.20, both suggesting that Aavas is priced significantly higher than these competitors. Additionally, the company's recent stock performance has lagged behind the Sensex, with a 1-year return of -11.24% compared to the Sensex's -3.90%, reinforcing the notion that Aavas Financiers is overvalued in the current market environment.
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