Is Muthoot Finance overvalued or undervalued?

As of 8 August 2025, Muthoot Finance's valuation grade has moved from very expensive to fair, indicating a shift in its perceived value. The company is currently fairly valued based on its financial metrics. Key ratios include a PE ratio of 19.75, an EV to EBIT of 13.44, and a PEG ratio of 0.87, which suggests that the stock is reasonably priced relative to its earnings growth potential.
When compared to peers, Muthoot Finance's PE ratio is notably higher than Life Insurance, which has a PE of 11.83, but lower than Bajaj Finance at 31.31. Additionally, Muthoot's EV to EBITDA of 13.33 is more attractive than Bajaj Finserv's 12.5. The company's recent performance has outpaced the Sensex, with a year-to-date return of 21.83% compared to the Sensex's 2.20%, reinforcing the notion that Muthoot Finance is fairly valued in the current market environment.