Is ARC Finance overvalued or undervalued?

As of 18 July 2025, ARC Finance has moved from an attractive to a very attractive valuation grade. The company appears to be undervalued, particularly when considering its PE ratio of 20.72 and an EV to EBITDA ratio of 11.27, which are favorable compared to its peers. For instance, Life Insurance has a PE ratio of 12.08 and an EV to EBITDA of 9.48, while Bajaj Finance is categorized as very expensive with a PE ratio of 35.18 and an EV to EBITDA of 19.57.
Notably, ARC Finance's PEG ratio stands at an impressive 0.03, indicating significant growth potential relative to its price. Additionally, the company's Price to Book Value is 0.85, suggesting that it is trading below its intrinsic value. Despite recent stock performance showing a decline of 29.93% year-to-date compared to a 4.63% increase in the Sensex, the underlying valuation metrics indicate that ARC Finance is positioned well for future growth, reinforcing its status as undervalued in the current market landscape.