Is Morarka Finance overvalued or undervalued?

As of 7 November 2025, Morarka Finance has moved from a fair to an expensive valuation grade. The company is currently considered overvalued, with a PE ratio of 23.55, an EV to EBIT ratio of 23.61, and a Price to Book Value of 0.04. These ratios indicate that the stock is priced high relative to its earnings and book value, especially when compared to peers such as Bajaj Finance, which has a PE ratio of 38.09, and Life Insurance, which boasts a much lower PE of 11.44 and is rated very attractive.
In terms of performance, Morarka Finance has underperformed the Sensex over the past year, with a stock return of -40.17% compared to the Sensex's 4.62%. This trend reinforces the view that the stock is overvalued, particularly given its low return on equity (ROE) and return on capital employed (ROCE), both at 0.17%. Overall, the combination of high valuation ratios and poor relative performance suggests that investors may want to exercise caution before considering an investment in Morarka Finance.