Is Muthoot Finance overvalued or undervalued?
As of August 22, 2025, Muthoot Finance is considered overvalued with a PE ratio of 17.42 and a valuation grade of expensive, despite strong past performance, indicating that investors may be overpaying for its future growth potential compared to peers.
As of 22 August 2025, Muthoot Finance's valuation grade has moved from fair to expensive, indicating a shift in its market perception. The company is currently overvalued based on its financial ratios, with a Price to Earnings (PE) ratio of 17.42, a Price to Book Value of 3.65, and an EV to EBITDA of 12.05. This suggests that the stock is trading at a premium compared to its earnings and book value.In comparison to its peers, Muthoot Finance's PE ratio is significantly higher than that of Life Insurance, which stands at 11.55, and it also exceeds the EV to EBITDA of 8.99 for the same company. Other competitors like Bajaj Finance and Bajaj Finserv are categorized as very expensive, with PE ratios of 31.91 and 32.97, respectively. Despite Muthoot Finance's strong returns over the past year, outperforming the Sensex with a 38.61% increase compared to the index's 0.31%, the current valuation suggests that investors may be overpaying for future growth potential.
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