Is My Mudra Fin. overvalued or undervalued?

As of 4 September 2025, the valuation grade for My Mudra Fin. has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently deemed overvalued, particularly when considering its PE ratio of 9.61, which is substantially lower than peers like Bajaj Finance at 33.36 and Bajaj Finserv at 33.62, both categorized as very expensive. Additionally, its EV to EBITDA ratio stands at 6.67, while Life Insurance, a peer in the same industry, shows a more attractive ratio of 8.87.
Despite a high ROCE of 80.82% and ROE of 53.64%, which suggest strong operational efficiency, the overall valuation metrics indicate that My Mudra Fin. is not just expensive but very expensive relative to its peers. The company's recent stock performance has outpaced the Sensex over the past week and month, with returns of 11.99% and 11.01%, respectively, but this does not sufficiently justify its current valuation status.