Is Mehta Securities overvalued or undervalued?

As of 14 August 2025, the valuation grade for Mehta Securities has moved from risky to very expensive, indicating a significant shift in its perceived value. The company is currently considered overvalued. Key ratios highlight this assessment: the PE ratio stands at 14.52, the Price to Book Value is 2.69, and the ROE is a mere 2.97%. These figures suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Mehta Securities' PE ratio is higher than that of Life Insurance, which is at 11.53, and significantly lower than Bajaj Finance's 30.73. The EV to EBITDA ratio for Mehta is notably negative at -14.47, contrasting sharply with Life Insurance's 8.97, further emphasizing the overvaluation. While Mehta Securities has shown impressive returns over the past five years, outperforming the Sensex, the current valuation metrics suggest that investors may be paying too much for the stock relative to its earnings potential.