Is IIFL Finance overvalued or undervalued?

Aug 07 2025 08:02 AM IST
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As of August 6, 2025, IIFL Finance is considered overvalued with a valuation grade of expensive, reflected in its high PE Ratio of 21.13 and other elevated financial metrics, despite a strong return of 41.10% over the past three years.
As of 6 August 2025, IIFL Finance's valuation grade has moved from fair to expensive, indicating that the company is currently overvalued. The key ratios reflect this assessment, with a PE Ratio of 21.13, an EV to EBITDA of 11.48, and a Price to Book Value of 1.55. These figures suggest that the stock is trading at a premium compared to its earnings and book value.

In comparison to its peers, IIFL Finance's PE Ratio is significantly higher than that of Life Insurance, which stands at 11.69, and also higher than the fair valuation of I R F C at 24.98. While the company has shown a strong return of 41.10% over the past three years compared to the Sensex's 37.95%, the recent shift in valuation grade and elevated ratios indicate that it may not be a prudent investment at its current price of 452.85.
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