Is Indostar Capital overvalued or undervalued?

As of 14 August 2025, Indostar Capital's valuation grade 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 PE ratio stands at -11.63, which is significantly negative, while the price-to-book value is 1.01, suggesting that the stock is trading at a premium relative to its book value. Additionally, the EV to EBITDA ratio is 28.99, indicating a high valuation compared to earnings before interest, taxes, depreciation, and amortization.
In comparison to its peers, Indostar Capital's metrics are less favorable. For instance, Life Insurance, which is rated very attractive, has a PE ratio of 11.53 and an EV to EBITDA of 8.97, showcasing a much healthier valuation. Bajaj Finserv, rated expensive, has an EV to EBITDA of 12.53, further highlighting Indostar's relative overvaluation. Despite a 12.1% return over the past year, which outperformed the Sensex's 1.89%, the overall valuation suggests that Indostar Capital is overvalued in the current market environment.