Is Aravali Sec overvalued or undervalued?

As of 19 September 2025, the valuation grade for Aravali Sec has moved from very attractive to risky, indicating a significant deterioration in its financial standing. The company is currently assessed as overvalued, primarily due to its negative financial ratios, including a PE ratio of -6.30, an EV to EBIT of -9.45, and a ROCE of -38.74%. These figures highlight severe challenges in profitability and operational efficiency.
In comparison with peers, Aravali Sec's valuation metrics starkly contrast with those of companies like Bajaj Finance, which has a PE ratio of 35.51, and Life Insurance, with a PE of 11.64. This disparity underscores the risk associated with Aravali Sec's current valuation. Additionally, the company's stock performance has been underwhelming, with a year-to-date return of -15.10%, significantly lagging behind the Sensex's gain of 5.74% during the same period.