Is IIFL Capital overvalued or undervalued?

As of 4 June 2025, the valuation grade for IIFL Capital has moved from fair to expensive, indicating that the company is overvalued. The key ratios reflect this assessment, with a PE Ratio of 14.93, Price to Book Value of 4.24, and an EV to EBITDA of 7.59. In comparison, its peer, IIFL Securities Ltd., also shows an expensive valuation with a PE of 14.93 and an EV to EBITDA of 7.59, suggesting that IIFL Capital is not competitively priced within its peer group.
The company's financial metrics, including a negative EV to Capital Employed and a high ROE of 28.41%, further support the conclusion of overvaluation. While IIFL Capital has outperformed the Sensex in various time frames, including a 1-year stock return of 56.25% compared to the Sensex's 7.57%, the current valuation does not justify the premium, making it appear overvalued in the current market context.