Is Nahar Capital overvalued or undervalued?

As of 1 February 2024, Nahar Capital's valuation grade has moved from fair to very expensive, indicating a significant shift in its market perception. The company is currently deemed overvalued. Key ratios include a PE Ratio of 10.25, an EV to EBITDA of 31.19, and a PEG Ratio of 0.03, which suggest that while the earnings are relatively low, the market is pricing the stock at a high multiple compared to its earnings growth potential.
In comparison to its peers, Nahar Capital's PE Ratio is lower than Bajaj Finance's 35.01 but higher than Life Insurance's 12.54, which reflects a mixed positioning within the industry. Additionally, its EV to EBITDA ratio is considerably higher than Life Insurance's 9.89, further supporting the overvaluation thesis. Notably, while Nahar Capital has outperformed the Sensex in the short term, with a 1-month return of 30.74% compared to the Sensex's 3.84%, the long-term performance shows a decline of 22.27% over three years, emphasizing the potential risks associated with its current valuation.