Is Muthoot Finance overvalued or undervalued?

Oct 15 2025 08:06 AM IST
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As of October 14, 2025, Muthoot Finance is considered very expensive and overvalued, with high valuation ratios compared to peers, despite a strong stock performance over the past year.
As of 14 October 2025, Muthoot Finance's valuation grade has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently considered overvalued. Key ratios reflect this assessment, with a Price-to-Earnings (PE) ratio of 20.99, a Price-to-Book (PB) ratio of 4.40, and an EV to EBITDA ratio of 13.39.

In comparison to its peers, Muthoot Finance's valuation stands out as notably high; for instance, Bajaj Finance has a PE ratio of 36.37, while Life Insurance offers a more attractive PE of 11.7. Additionally, the PEG ratio for Muthoot Finance is 0.56, which, while seemingly favorable, does not compensate for the overall high valuation in the context of its peers. Despite recent strong stock performance, including a 65.19% return over the past year compared to a mere 0.07% for the Sensex, the current valuation metrics suggest that Muthoot Finance is overvalued.
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