Is Aditya AMC overvalued or undervalued?

As of 9 May 2025, the valuation grade for Aditya AMC has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued based on its financial metrics. Key ratios include a PE Ratio of 24.09, an EV to EBITDA of 22.63, and a Price to Book Value of 6.02, all of which suggest that the stock is trading at a premium compared to its intrinsic value.
In comparison with peers, Aditya AMC's PE Ratio is notably higher than Life Insurance, which has a PE of 12.54, and even exceeds Bajaj Finance Ltd.'s very expensive rating of 35.01. This disparity highlights the overvaluation of Aditya AMC within its industry. Additionally, while the stock has shown strong performance over the past year with a return of 38.96% compared to the Sensex's 7.55%, the current valuation metrics suggest that investors may be overestimating future growth potential.