Is Muthoot Finance overvalued or undervalued?

As of 4 July 2025, Muthoot Finance has moved from a fair valuation to an expensive one. The company is currently overvalued based on its financial ratios. The PE ratio stands at 20.18, the Price to Book Value is 3.64, and the EV to EBITDA is 13.49. In comparison to its peers, Life Insurance has a PE ratio of 12.32 and EV to EBITDA of 9.69, while Bajaj Finance is categorized as very expensive with a PE ratio of 34.56.
Despite Muthoot Finance's strong performance, with a year-to-date return of 24.52% compared to the Sensex's 6.77%, the current valuation metrics suggest that the stock is trading at a premium. The PEG ratio of 0.89 indicates potential growth, but the overall high valuation relative to peers suggests caution for investors considering entry at this price level.