Is Avonmore Capital overvalued or undervalued?

As of 17 November 2025, Avonmore Capital's valuation grade has moved from attractive to expensive, indicating a shift in its perceived value. The company is currently considered overvalued based on its financial metrics. Key ratios include a PE Ratio of 36.90, an EV to EBITDA of 21.94, and a Price to Book Value of 1.37, which are significantly higher than many of its peers.
In comparison, Bajaj Finance, which is categorized as very expensive, has a PE Ratio of 34.85 and an EV to EBITDA of 19.61, while Life Insurance is seen as very attractive with a PE Ratio of 11.33 and an EV to EBITDA of 9.36. These comparisons highlight that Avonmore Capital's valuation is not justified when looking at its performance metrics, especially given its low ROCE of 4.79% and ROE of 3.71%. Although Avonmore has outperformed the Sensex over the past year with a return of 43.94% compared to the Sensex's 9.50%, this does not mitigate the fact that its current valuation appears excessive.