Is Avasara Finance overvalued or undervalued?

As of 10 October 2025, Avasara Finance's valuation grade has moved from risky to does not qualify, indicating significant concerns regarding its financial health. The company is currently overvalued, with a PE ratio of -12.83 and an EV to EBITDA ratio of -12.82, both reflecting negative earnings. Additionally, the Price to Book Value stands at 6.38, which is considerably high compared to industry norms.
In comparison to its peers, Avasara Finance's metrics are starkly unfavorable. For instance, Bajaj Finance has a PE ratio of 36.56, and Life Insurance boasts a PE of 11.65, both suggesting a much stronger financial position. Furthermore, Avasara's negative ROCE of -10.47% and ROE of -9.95% highlight its inefficiency in generating returns compared to its peers. The company's recent stock performance has also been poor, with a 1-year return of -17.63%, contrasting sharply with the Sensex's 1.09% return, reinforcing the notion of overvaluation.