Is Shriram AMC overvalued or undervalued?

As of 17 October 2025, the valuation grade for Shriram AMC has moved from risky to very expensive. The company is currently overvalued, as indicated by its negative PE ratio of -39.51, an EV to EBITDA of -37.21, and a Price to Book Value of 11.23. These ratios suggest that the company's valuation metrics are significantly unfavorable compared to its peers.
In comparison, Bajaj Finance has a PE ratio of 38.21 and an EV to EBITDA of 20.25, while Life Insurance shows a more attractive valuation with a PE ratio of 11.49 and an EV to EBITDA of 8.94. The stark contrast in these ratios highlights Shriram AMC's overvaluation in the capital markets industry. Additionally, the company's stock has underperformed relative to the Sensex, with a year-to-date return of -31.91% compared to the Sensex's 7.44%, further reinforcing the notion of overvaluation.