Is Margo Finance overvalued or undervalued?

As of 2 June 2025, Margo Finance's valuation grade has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently assessed as overvalued. Key ratios include a PE Ratio of 38.73, an EV to EBIT of 38.51, and a Price to Book Value of 0.23, which highlight the disparity between its market price and fundamental performance.
In comparison to its peers, Margo Finance's PE Ratio is notably higher than Life Insurance's 12.54 and Bajaj Finserv's 35.83, both of which are categorized as fair or expensive, respectively. Additionally, while Margo's PEG Ratio stands at 0.82, Bajaj Finance has a much higher PEG of 2.38, further emphasizing Margo's overvaluation. Despite a strong performance over the past year with a stock return of 98.80% compared to the Sensex's 7.60%, the current valuation metrics suggest that Margo Finance is not justified at its current price level.