Is Muthoot Finance overvalued or undervalued?

Jul 15 2025 08:02 AM IST
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As of July 14, 2025, Muthoot Finance is considered overvalued with a PE ratio of 20.22 and a Price to Book Value of 3.65, despite outperforming the Sensex with a year-to-date return of 24.73%.
As of 14 July 2025, Muthoot Finance's valuation grade has moved from fair to expensive, indicating a shift in its market perception. The company appears to be overvalued based on its current metrics, with a PE ratio of 20.22, a Price to Book Value of 3.65, and an EV to EBITDA of 13.50.

In comparison to its peers, Muthoot Finance's valuation stands out, particularly against Life Insurance, which has a PE ratio of 11.99 and an EV to EBITDA of 9.4, and Bajaj Finance, which is categorized as very expensive with a PE ratio of 34.32. The company's recent stock performance has outpaced the Sensex, with a year-to-date return of 24.73% compared to the Sensex's 5.27%, reinforcing the notion that while the stock has performed well, it is currently overvalued in relation to its fundamentals.
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