Is Emerald Finance overvalued or undervalued?

Jul 13 2025 08:00 AM IST
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As of July 11, 2025, Emerald Finance is considered overvalued with a PE ratio of 36.59 and a valuation grade shift from fair to expensive, especially when compared to peers like Life Insurance at 12.07 and Bajaj Finserv at 36.31, despite a strong past year return of 131.67%.
As of 11 July 2025, the valuation grade for Emerald Finance has moved from fair to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued, with a PE ratio of 36.59, a Price to Book Value of 3.85, and an EV to EBITDA ratio of 21.58. These figures suggest that the stock is trading at a premium compared to its earnings and book value.

In comparison to its peers, Emerald Finance's PE ratio is significantly higher than that of Life Insurance, which stands at 12.07, and even Bajaj Finserv, which is at 36.31. The PEG ratio of Emerald Finance at 0.42 also highlights a disparity, especially when compared to Bajaj Finance's much higher PEG of 2.37. Despite a strong performance in the past year, with a return of 131.67% compared to the Sensex's 3.26%, the current valuation metrics suggest that the stock may not be justified at its current price level.
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