Is Franklin Leasing overvalued or undervalued?

As of 28 August 2025, the valuation grade for Franklin Leasing has moved from fair to very expensive, indicating a significant shift in its perceived value. The company is currently considered overvalued. Key ratios include a PE ratio of 17.68, an EV to EBITDA of 4.32, and a PEG ratio of 1.68, which suggest that the company's earnings are not sufficiently strong to justify its current price level.
In comparison to its peers, Franklin Leasing's valuation appears excessive, especially when contrasted with Life Insurance, which has a PE ratio of 11.27 and an EV to EBITDA of 8.74, both indicating a more attractive investment opportunity. Additionally, Bajaj Finance, while classified as very expensive, has a much higher PE ratio of 31.28, further highlighting the relative overvaluation of Franklin Leasing. The stock has underperformed significantly, with a year-to-date return of -38.22% compared to a 2.48% gain in the Sensex, reinforcing the notion that it is overvalued in the current market environment.