Is IIFL Finance overvalued or undervalued?

As of 31 October 2025, the valuation grade for IIFL Finance has moved from very expensive to expensive, indicating a slight improvement in perceived value. The company is currently considered overvalued based on its financial ratios. Key metrics include a PE ratio of 26.55, an EV to EBITDA ratio of 4.03, and a ROE of just 0.66%.
In comparison to peers, Bajaj Finance is categorized as very expensive with a PE ratio of 37.23, while Life Insurance stands out as very attractive with a PE of 11.62. This suggests that IIFL Finance's valuation is relatively high compared to its more attractively priced competitors. Despite a strong performance against the Sensex, with a year-to-date return of 29.48% compared to the Sensex's 7.42%, the overall valuation suggests caution for potential investors.