Is Sakthi Finance overvalued or undervalued?

Aug 31 2025 08:04 AM IST
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As of August 29, 2025, Sakthi Finance is considered overvalued with a PE ratio of 17.44 and a decline of 23.57% year-to-date, contrasting with its peers and the Sensex's positive return.
As of 29 August 2025, Sakthi Finance's valuation grade has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued based on key financial ratios, including a PE ratio of 17.44, an EV to EBITDA of 8.95, and a PEG ratio of 3.71. These figures suggest that the stock is trading at a premium compared to its earnings growth potential.

In comparison to its peers, Sakthi Finance's PE ratio is notably lower than that of Bajaj Finance, which stands at 31.3, and Bajaj Finserv at 32.09, both categorized as very expensive. Conversely, Life Insurance is considered very attractive with a PE of 11.08, highlighting the disparity in valuation within the sector. Additionally, while Sakthi Finance has experienced a 1-week stock return of 1.65%, it has underperformed significantly on a year-to-date basis with a decline of 23.57%, contrasting with the Sensex's positive return of 2.14%. This further reinforces the conclusion that Sakthi Finance is currently overvalued.
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