Is Jio Financial overvalued or undervalued?

As of 18 October 2023, Jio Financial's valuation grade has moved from does not qualify to very expensive, indicating a significant shift in its perceived market value. The company is currently considered overvalued, with a PE ratio of 115.81, an EV to EBITDA ratio of 120.56, and a ROE of just 1.31%. These ratios starkly contrast with peers such as Life Insurance, which has a PE ratio of 12.54 and an EV to EBITDA of 9.89, suggesting that Jio Financial's valuation is not justified by its earnings or operational performance.
In comparison to other firms in the sector, Bajaj Finance Ltd. is also categorized as very expensive with a PE ratio of 35.01, yet it is still significantly lower than Jio Financial's metrics. Additionally, SBI Life Insurance Co. Ltd. stands out as very attractive with a PE of 74.03, further emphasizing the overvaluation of Jio Financial. Despite a recent stock return of 21.32% over the past month, which outperformed the Sensex's 3.80%, the overall valuation metrics indicate that Jio Financial is not a sound investment at its current price of 301.00.