Is Dharni Capital overvalued or undervalued?

As of 29 April 2025, the valuation grade for Dharni Capital has moved from risky to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a PE ratio of 33.72, a Price to Book Value of 6.34, and an EV to EBITDA ratio of 30.23. These ratios suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Dharni Capital's valuation metrics are notably high. For instance, Life Insurance has a PE ratio of 12.54 and an EV to EBITDA of 9.89, while Bajaj Finance Ltd. has a PE of 35.01 but a significantly lower EV to EBITDA of 19.51. This indicates that Dharni Capital is not only more expensive than its direct competitors but also lacks the relative value that justifies such high multiples. Furthermore, the company's stock has outperformed the Sensex in the past year, returning 27.08% compared to the Sensex's 7.55%, which may have contributed to its elevated valuation.