Is Madhusudan Sec. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Madhusudan Sec. has moved from risky to very expensive. This indicates a significant shift in perception regarding the company's valuation. Based on the analysis, Madhusudan Sec. appears to be overvalued. The company has a PE ratio of -67.21, an EV to EBITDA of -9.58, and a Price to Book Value of 0.49, which suggests that the market is pricing the company unfavorably compared to its earnings and asset value.
In comparison to its peers, Madhusudan Sec. stands out with a notably negative PE ratio, while Bajaj Finance has a PE of 38.21 and Bajaj Finserv has a PE of 34.94, both indicating a more favorable valuation. Furthermore, the company’s ROCE and ROE are both negative at -1.13% and -0.73%, respectively, further supporting the conclusion of overvaluation. While Madhusudan Sec. has shown a strong return of 5.54% over the past week compared to the Sensex's 1.76%, its year-to-date return of -12.28% relative to the Sensex's 7.44% highlights ongoing challenges in maintaining investor confidence.