Is ARC Finance overvalued or undervalued?

As of 14 November 2025, ARC Finance has moved from a valuation grade of very expensive to risky. The company is currently assessed as overvalued. Key ratios include a PE Ratio of -30.37, an EV to EBITDA of -27.16, and a Price to Book Value of 0.66, which indicate significant financial distress and a lack of profitability.
In comparison to peers, Bajaj Finance has a PE Ratio of 34.62, while Life Insurance stands at 11.25, highlighting the stark contrast in valuation metrics within the industry. The negative ROE of -2.19% and a low ROCE of 7.26% further emphasize the challenges faced by ARC Finance. Despite a recent stock return of -45.26% year-to-date compared to a positive 8.22% return of the Sensex, the company's valuation remains concerning, suggesting that investors should exercise caution.