Is Muthoot Finance overvalued or undervalued?

Jul 05 2025 08:01 AM IST
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As of July 4, 2025, Muthoot Finance is considered overvalued with a PE ratio of 20.18 and a valuation grade of expensive, despite a strong 47.60% return over the past year, compared to lower ratios in its peer group.
As of 4 July 2025, Muthoot Finance's valuation grade has moved from fair to expensive, indicating a shift in perception regarding its market value. The company appears to be overvalued based on its current metrics, with a PE Ratio of 20.18, a Price to Book Value of 3.64, and an EV to EBITDA of 13.49.

When compared to peers, Muthoot Finance's PE ratio is significantly higher than that of Life Insurance, which stands at 12.32, and also exceeds the EV to EBITDA ratio of Bajaj Finserv at 13.39. Despite strong returns, including a 47.60% increase over the past year compared to a 4.23% rise in the Sensex, the current valuation suggests that investors may be paying a premium for Muthoot Finance's stock.
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