Is Muthoot Finance overvalued or undervalued?

Aug 15 2025 08:07 AM IST
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As of August 14, 2025, Muthoot Finance is considered overvalued with a PE Ratio of 17.99, significantly higher than its peers, despite outperforming the Sensex year-to-date with a return of 28.80%.
As of 14 August 2025, Muthoot Finance has moved from a fair to an expensive valuation grade. The company is currently overvalued based on its financial metrics. Key ratios include a PE Ratio of 17.99, a Price to Book Value of 3.77, and an EV to EBIT of 12.36.

In comparison to its peers, Muthoot Finance's PE Ratio is significantly higher than Life Insurance, which has a PE of 11.53, indicating that Muthoot is trading at a premium despite its valuation being classified as expensive. Additionally, Bajaj Finance is also categorized as very expensive with a PE of 30.73, further illustrating that Muthoot's valuation does not align favorably within its sector. Notably, Muthoot Finance has outperformed the Sensex with a year-to-date return of 28.80%, compared to the Sensex's 3.15%, but this performance does not justify its current overvaluation.
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