Is Arihant Capital overvalued or undervalued?

As of 24 October 2025, Arihant Capital's valuation grade has moved from fair to attractive, indicating a positive shift in its market perception. The company appears to be undervalued, particularly given its PE ratio of 20.80, EV to EBITDA of 8.79, and a remarkable ROCE of 119.12%. In comparison to its peers, Arihant Capital's valuation metrics stand out; for instance, Bajaj Finance is considered very expensive with a PE ratio of 38.9, while Life Insurance is very attractive at a PE of 11.55.
Despite recent stock performance showing a decline of 9.29% over the past year compared to a 5.18% increase in the Sensex, the long-term perspective remains strong, with a staggering 751.19% return over the past five years. This suggests that while short-term fluctuations may present challenges, the underlying value of Arihant Capital is compelling when assessed against its peers and historical performance.