Is Purple Finance overvalued or undervalued?

As of 10 October 2025, the valuation grade for Purple Finance has moved from risky to very expensive, indicating a significant deterioration in its perceived value. The company appears to be overvalued based on its financial metrics, with a PE ratio of -11.75, an EV to EBITDA of -18.36, and a Price to Book Value of 2.46. These ratios suggest that the company is not generating positive earnings, which raises concerns about its financial health.
In comparison to its peers, Purple Finance's valuation stands out unfavorably. For instance, Bajaj Finance has a PE ratio of 36.56, while Life Insurance boasts a PE of 11.65, both of which indicate more favorable valuations in the industry. Furthermore, Purple Finance's recent stock performance has been poor, with a year-to-date return of -48.26%, significantly underperforming the Sensex's gain of 5.58% during the same period. Overall, the analysis suggests that Purple Finance is overvalued in the current market environment.