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 considered overvalued given its negative PE ratio of -6.30, an EV to EBIT of -9.45, and a ROCE of -38.74%. These figures suggest that the company's earnings and capital efficiency are under severe strain.
In comparison to its peers, Aravali Sec's valuation metrics starkly contrast with those of Bajaj Finance, which has a PE ratio of 35.51, and Life Insurance, boasting a PE of 11.64. This highlights the substantial gulf in valuation and performance within the industry. Additionally, while Aravali Sec has experienced a 1-week stock return of 1.71%, its year-to-date return of -15.10% and 3-year return of -33.97% further emphasize its struggles relative to the Sensex, which has shown positive growth. Overall, Aravali Sec appears to be overvalued in its current state.