Is Arihant Capital overvalued or undervalued?

As of 24 October 2025, Arihant Capital has moved from a fair to an attractive valuation grade. The company is currently considered undervalued, with a PE ratio of 20.80, an EV to EBITDA ratio of 8.79, and a ROE of 14.62%. In comparison to its peers, Bajaj Finance is classified as very expensive with a PE of 38.9, while Life Insurance is very attractive with a PE of 11.55, highlighting Arihant's relative value in the market.
Despite a recent decline in stock price, Arihant Capital has shown strong performance over the long term, with a remarkable 5-year return of 751.19%, significantly outpacing the Sensex's 106.98% during the same period. This long-term growth potential, combined with its attractive valuation metrics, reinforces the conclusion that Arihant Capital is currently undervalued in the capital markets sector.