Is Muthoot Finance overvalued or undervalued?

As of 17 June 2025, Muthoot Finance has moved from a fair valuation to an expensive rating. The company is currently considered overvalued based on its financial ratios, with a PE ratio of 20.01, a Price to Book Value of 3.61, and an EV to EBITDA of 13.42. In comparison to its peers, Life Insurance is rated fair with a PE of 12.4, while Bajaj Finance is deemed very expensive with a PE of 34.47, highlighting Muthoot Finance's relatively high valuation within its industry.
The company's performance has been strong, with a year-to-date return of 23.43%, significantly outpacing the Sensex's return of 4.41% during the same period. However, despite this strong performance, the elevated valuation ratios suggest that Muthoot Finance may not offer attractive investment opportunities at its current price of 2642.60.