Is Sakthi Finance overvalued or undervalued?

As of 9 June 2025, Sakthi Finance has moved from a fair valuation to an expensive rating. The company appears to be overvalued based on its current metrics, with a PE ratio of 19.82, a Price to Book Value of 1.44, and an EV to EBITDA of 9.32. These ratios indicate that the stock is trading at a premium compared to its intrinsic value.
In comparison to its peers, Sakthi Finance's valuation stands out, particularly against Life Insurance, which has a PE ratio of 12.61 and is rated as fair. Other peers like Bajaj Finance and Bajaj Finserv are categorized as very expensive with significantly higher PE ratios of 35.89 and 36.32, respectively. While Sakthi Finance has shown strong returns over the long term, its recent performance has lagged behind the Sensex, with a year-to-date return of -14.31% compared to the Sensex's 5.51%.