Is IIFL Finance overvalued or undervalued?

As of 27 October 2025, IIFL Finance's valuation grade has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently assessed as overvalued. Key ratios include a PE ratio of 23.60, an EV to EBITDA of 11.87, and a ROCE of 9.10%.
In comparison to its peers, IIFL Finance's PE ratio is notably lower than Bajaj Finance's 38.72 but higher than Life Insurance's 11.65, which is categorized as very attractive. Additionally, the company's PEG ratio stands at 0.00, suggesting that growth expectations may not be reflected in its current price. Despite recent stock performance showing a 26.97% return over the past year compared to the Sensex's 6.77%, the overall valuation metrics indicate that IIFL Finance is priced at a premium, reinforcing the conclusion of being overvalued.