Is Paul Merchants overvalued or undervalued?

As of 6 October 2025, the valuation grade for Paul Merchants has moved from very expensive to expensive. The company is currently considered overvalued. Key ratios include a PE ratio of 32.78, an EV to EBIT of 9.22, and a Price to Book Value of 0.33. In comparison to peers, Bajaj Finance has a PE ratio of 36.03, while Life Insurance boasts a much lower PE of 11.78, indicating that Paul Merchants is trading at a premium relative to some competitors.
Despite its high valuation metrics, Paul Merchants has shown poor stock performance, with a year-to-date return of -28.57%, significantly underperforming the Sensex, which has gained 4.67% in the same period. This underperformance, coupled with its elevated valuation ratios, reinforces the conclusion that the company is overvalued in the current market environment.