Is Franklin Leasing overvalued or undervalued?

As of 4 September 2025, the valuation grade for Franklin Leasing has moved from risky to very expensive, indicating a significant shift in its perceived market value. The company is currently considered overvalued. Key ratios include a PE ratio of 17.68, an EV to EBIT of 5.67, and a Price to Book Value of 0.47, which suggest that the stock is priced high relative to its earnings and book value.
In comparison to peers, Franklin Leasing's PE ratio of 17.68 is notably lower than Bajaj Finance's 33.36, yet higher than Life Insurance's attractive PE of 11.41, highlighting a disparity in valuation among similar companies. Additionally, the company's return on equity (ROE) stands at a mere 0.55%, which is significantly lower than the industry average, further supporting the overvaluation claim. Despite a recent decline in stock performance, with a year-to-date return of -38.22% compared to a 3.30% gain in the Sensex, the valuation metrics indicate that Franklin Leasing is not a favorable investment at this time.