Is Purple Finance overvalued or undervalued?

As of 19 September 2025, the valuation grade for Purple Finance has moved from very expensive to risky. The company appears to be overvalued given its negative PE ratio of -12.49 and EV to EBIT of -16.83, alongside a Price to Book Value of 2.62. Notably, the company's ROE stands at -20.95%, indicating significant challenges in generating returns for shareholders. In comparison to its peers, Purple Finance's valuation metrics are starkly lower than those of Bajaj Finance, which has a PE ratio of 35.51, and Life Insurance, with a PE of 11.64. The negative earnings ratios suggest that Purple Finance is struggling relative to its industry, which is reflected in its poor stock performance, with a year-to-date return of -44.97% compared to the Sensex's positive return of 5.74%. Overall, the company is considered overvalued in the current market environment.