Is Indostar Capital overvalued or undervalued?

As of 14 July 2025, the valuation grade for Indostar Capital has moved from very expensive to expensive. The company is currently considered overvalued based on its high PE ratio of 80.65, an EV to EBIT of 13.78, and an EV to EBITDA of 13.26. These ratios indicate that the stock is trading at a significant premium compared to its earnings and cash flow generation capabilities.
In comparison to its peers, Indostar Capital's valuation metrics stand out unfavorably. For instance, Life Insurance, which is rated fair, has a PE ratio of 11.99 and an EV to EBITDA of 9.4, while Bajaj Finserv, rated as expensive, has a PE of 36.04 and an EV to EBITDA of 13.41. The stark contrast in these ratios highlights that Indostar Capital is not only overvalued relative to its industry peers but also lacks the growth potential indicated by its PEG ratio of 0.00. Despite a strong year-to-date return of 15.1% compared to the Sensex's 5.27%, the valuation metrics suggest that investors should exercise caution.