Is Aravali Sec overvalued or undervalued?

As of 28 August 2025, the valuation grade for Aravali Sec has moved from very attractive to risky, indicating a significant deterioration in its financial health. The company is currently assessed as overvalued, particularly given its negative PE ratio of -5.96, an EV to EBIT of -9.11, and a ROCE of -38.74%. These figures suggest that the company is struggling to generate profits and is facing substantial financial challenges.
In comparison to its peers, Aravali Sec's ratios starkly contrast with those of Life Insurance, which boasts a PE ratio of 11.27 and an EV to EBITDA of 8.74, reflecting a much healthier valuation. Other competitors like Bajaj Finance and Bajaj Finserv also show significantly higher valuations, with PE ratios of 31.28 and 32.13, respectively. The recent stock performance has been poor, with a year-to-date return of -19.80%, significantly lagging behind the Sensex's return of 2.48%, further reinforcing the notion that Aravali Sec is overvalued in the current market environment.