Is Purple Finance overvalued or undervalued?

As of 17 October 2025, the valuation grade for Purple Finance has moved from risky to very expensive, indicating a significant deterioration in its valuation outlook. The company is currently considered overvalued. Key financial ratios reveal a PE ratio of -11.87, an EV to EBITDA of -18.51, and a ROE of -20.95%, all of which suggest poor financial performance relative to its market price.
When compared to peers, Purple Finance stands out unfavorably; for instance, Bajaj Finance has a PE ratio of 38.21 and an EV to EBITDA of 20.25, while Life Insurance boasts a PE of 11.49 and an EV to EBITDA of 8.94. This stark contrast highlights the overvaluation of Purple Finance in the current market. Additionally, the company's stock has underperformed significantly, with a year-to-date return of -47.72% compared to a 7.44% gain in the Sensex, reinforcing the notion that it is overvalued in the context of its financial health and market performance.