Is Muthoot Finance overvalued or undervalued?

As of 22 August 2025, Muthoot Finance's valuation grade has moved from fair to expensive, indicating a shift in its perceived value. The company is currently overvalued based on its key financial ratios, including a PE ratio of 17.42, an EV to EBITDA of 12.05, and a Price to Book Value of 3.65. Compared to its peers, Muthoot Finance's valuation appears high, especially when considering Life Insurance with a PE of 11.55 and Bajaj Finserv at a PE of 32.97.
In summary, Muthoot Finance is overvalued given its current metrics and the comparative analysis with its peers. While the company has shown strong returns, including a 38.61% increase over the past year, its elevated valuation ratios suggest that investors may be paying a premium that is not justified by its financial performance relative to the market.