Is Muthoot Finance overvalued or undervalued?

As of 8 August 2025, the valuation grade for Muthoot Finance has moved from very expensive to fair. 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 growth potential.
In comparison to its peers, Muthoot Finance's PE ratio is more favorable than Bajaj Finance, which has a PE of 31.31, and Bajaj Finserv, with a PE of 32.16. However, it is less attractive than Life Insurance, which has a PE of 11.83. Muthoot Finance has outperformed the Sensex over the past year, returning 41.59% compared to the Sensex's 1.23%, reinforcing the notion that it is fairly valued in the current market context.