Is Arihant Capital overvalued or undervalued?

As of 1 October 2025, the valuation grade for Arihant Capital has moved from attractive to fair, indicating a shift in market perception. The company is currently fairly valued, with a PE ratio of 23.69, an EV to EBITDA ratio of 10.52, and a ROE of 14.62%. In comparison to its peers, Bajaj Finance is considered very expensive with a PE ratio of 35.27, while Life Insurance stands out as very attractive with an EV to EBITDA of 9.16.
Despite the recent downgrade in valuation, Arihant Capital has shown strong performance, with a year-to-date return of 15.97%, significantly outperforming the Sensex's 3.64% over the same period. This suggests that while the stock is currently fairly valued, its strong returns may indicate underlying growth potential that could warrant a reassessment in the future.