Is Arihant Capital overvalued or undervalued?

As of 1 July 2025, the valuation grade for Arihant Capital has moved from attractive to very attractive, indicating a significant positive shift in its perceived value. The company is currently considered undervalued, supported by a PE ratio of 16.63, an EV to EBITDA ratio of 6.73, and a remarkable ROCE of 119.12%.
When compared to peers, Arihant Capital stands out with a lower PE ratio than Life Insurance, which has a PE of 12.71, while being significantly more attractive than Bajaj Finance, which is categorized as very expensive with a PE of 34.98. Notably, Arihant's PEG ratio of 0.00 further emphasizes its undervaluation relative to growth potential. Additionally, the company's stock has outperformed the Sensex over the past year, with a return of 24.74% compared to the Sensex's 5.31%, reinforcing the valuation narrative.