Is Paul Merchants overvalued or undervalued?

As of 10 October 2025, the valuation grade for Paul Merchants has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently assessed as overvalued based on its high PE ratio of 32.54, an EV to EBIT of 9.14, and a notably low Price to Book Value of 0.33. These ratios suggest that the stock is trading at a premium compared to its underlying assets and earnings potential.
In comparison to its peers, Paul Merchants stands out with a higher PE ratio than Bajaj Finserv at 33.63 and a much lower EV to EBITDA than Life Insurance at 9.08, highlighting its relative overvaluation in the market. Furthermore, the company's recent performance has lagged behind the Sensex, with a year-to-date return of -29.10% compared to the Sensex's 5.58%, reinforcing the notion that the stock may not justify its current price level.