Is Paul Merchants overvalued or undervalued?

As of 10 October 2025, the valuation grade for Paul Merchants has moved from expensive to very expensive. This indicates a significant increase in perceived overvaluation. The company is currently assessed as overvalued, with a PE ratio of 32.54, an EV to EBIT of 9.14, and an EV to EBITDA of 7.50.
In comparison to peers, Bajaj Finance has a higher PE ratio of 36.56 and an EV to EBITDA of 19.67, while Life Insurance stands out with a much lower PE of 11.65 and an EV to EBITDA of 9.08, highlighting the disparity in valuations within the sector. Furthermore, Paul Merchants has underperformed relative to the Sensex, with a year-to-date return of -29.10% compared to the Sensex's 5.58%, reinforcing the notion of overvaluation amidst declining stock performance.