Is Alacrity Sec. overvalued or undervalued?

As of 27 June 2025, the valuation grade for Alacrity Sec. has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently overvalued, with a PE ratio of 25.95, an EV to EBIT of 26.17, and an EV to EBITDA of 25.23. In comparison to its peers, Life Insurance has a fair PE ratio of 12.53, while Bajaj Finance is also categorized as very expensive with a PE ratio of 35.35, highlighting the premium at which Alacrity Sec. is trading.
Despite its high return on capital employed (ROCE) of 22.22% and return on equity (ROE) of 19.48%, the company's valuation metrics suggest that it is not justified given its current performance and market conditions. Additionally, Alacrity Sec.'s stock has underperformed relative to the Sensex, with a year-to-date return of -56.13% compared to the Sensex's positive return of 7.58%. This further reinforces the assessment that Alacrity Sec. is overvalued in the current market environment.