Is Maruti Sec. overvalued or undervalued?

As of 29 August 2025, the valuation grade for Maruti Sec. has moved from risky to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, particularly when considering its headline ratios, which include a PE ratio of 2.92, an EV to EBIT of 5.63, and an EV to Sales ratio of 5.12. These figures suggest that the stock is trading at a premium compared to its earnings and sales, raising concerns about its valuation.
In comparison to peers, Maruti Sec. stands out negatively with a PE ratio of -28.69, while Bajaj Finance has a PE ratio of 31.3, highlighting the disparity in valuation within the industry. Additionally, Life Insurance, which is rated very attractive, has a PE ratio of 11.08, further emphasizing Maruti Sec.'s overvaluation. Despite recent stock performance showing a substantial return compared to the Sensex, with a 1-month return of 134.69% against the Sensex's -1.88%, the underlying valuation metrics suggest caution for potential investors.