Is Indostar Capital overvalued or undervalued?

As of 18 July 2025, the valuation grade for Indostar Capital has moved from very expensive to expensive, indicating a slight improvement in its perceived value. However, the company remains overvalued based on its current metrics. The price-to-earnings (PE) ratio stands at an exceptionally high 82.78, while the price-to-book value is 1.20, and the EV to EBITDA ratio is 13.40. These figures suggest that the market is pricing the company at a premium compared to its earnings and asset values.
In comparison to peers, Indostar Capital's PE ratio is significantly higher than that of Life Insurance, which has a PE of 12.08, and Bajaj Finserv, with a PE of 36.56. This disparity highlights that Indostar Capital may not justify its current valuation relative to its industry counterparts. Additionally, while the stock has performed well year-to-date with a return of 18.14% compared to the Sensex's 4.63%, this performance does not mitigate the overvaluation indicated by the ratios.