Is Prime Securities overvalued or undervalued?

As of 14 July 2025, the valuation grade for Prime Securities has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued. Key ratios include a PE ratio of 29.82, an EV to EBITDA of 20.31, and a PEG ratio of 0.33, which suggests that despite high earnings growth expectations, the stock price may not be justified by its current earnings.
When compared to peers, Prime Securities stands out with a higher PE ratio than Life Insurance at 11.99 and Bajaj Finance at 34.32, while its EV to EBITDA ratio is also higher than the industry average. Notably, the company's impressive ROCE of 431.69% and ROE of 17.23% highlight operational efficiency, yet these metrics do not compensate for the high valuation. Additionally, Prime Securities has outperformed the Sensex significantly over various time frames, including a 1Y return of 23.41% compared to the Sensex's 2.15%, reinforcing concerns about its current valuation level.