Is Muthoot Finance overvalued or undervalued?

As of 14 August 2025, Muthoot Finance's valuation grade has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued based on its PE ratio of 17.99, a Price to Book Value of 3.77, and an EV to EBITDA of 12.27. In comparison to peers, Life Insurance is rated very attractive with a PE of 11.53, while Bajaj Finance is considered very expensive with a PE of 30.73, highlighting Muthoot Finance's relatively high valuation in its sector.
The company's financial metrics suggest that it is not only overvalued but also exhibits a lower PEG ratio of 0.48 compared to its peers, indicating potential growth at a slower pace than expected relative to its price. Despite its strong returns, with a 1Y stock return of 52.17% compared to the Sensex's 1.89%, the current valuation signals caution for potential investors.