Is Reliance Home overvalued or undervalued?

As of 19 August 2025, the valuation grade for Reliance Home has moved from attractive to risky, indicating a significant deterioration in its financial standing. The company is currently overvalued, as evidenced by its troubling financial ratios, including a PE ratio of -66.96, an EV to EBIT of -96.47, and an ROCE of -113.46%. These figures highlight the company's struggles in generating profits relative to its capital employed.
In comparison to its peers, Reliance Home's valuation stands out negatively. For instance, HUDCO is categorized as very expensive with a PE ratio of 15.43, while LIC Housing Finance is considered attractive with a PE of 5.79. This stark contrast in valuation metrics underscores Reliance Home's unfavorable position within the housing finance sector. Despite a strong year-to-date return of 18.27%, the company's current valuation does not reflect a sustainable growth trajectory, reinforcing the conclusion that it is overvalued.