Is Explicit Finance overvalued or undervalued?

As of 17 October 2025, the valuation grade for Explicit Finance has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently deemed overvalued based on its high valuation metrics. The price-to-earnings (PE) ratio stands at 51.22, while the price-to-book value is 1.23, and the EV to EBITDA ratio is 7.85. These figures suggest that investors are paying a premium for the company's earnings relative to its peers.
In comparison to its industry peers, Explicit Finance's PE ratio is substantially higher than Bajaj Finance at 38.21 and Life Insurance at 11.49, both of which are categorized as very expensive and very attractive, respectively. Additionally, the PEG ratio for Explicit Finance is notably low at 0.07, further reinforcing the notion of overvaluation. Despite a strong year-to-date return of 46.85% compared to the Sensex's 7.44%, the current valuation metrics indicate that the stock may not be justified at its current price level.