Is Smart Finsec overvalued or undervalued?

As of 1 July 2025, the valuation grade for Smart Finsec has moved from very expensive to expensive. Based on the analysis, Smart Finsec appears to be overvalued. The company has a PE ratio of 35.10, an EV to EBITDA ratio of 26.18, and a Price to Book Value of 2.83, which are significantly higher than its peers. For instance, Life Insurance has a PE ratio of 12.71 and an EV to EBITDA of 10.03, indicating a stark contrast in valuation metrics.
In comparison to other firms in the industry, Bajaj Finserv is also categorized as expensive with a PE ratio of 36.92, but it has a much lower EV to EBITDA ratio of 13.57. The PEG ratio for Smart Finsec is notably at 0.00, which suggests no growth expectations are being priced in, further reinforcing the overvaluation stance. Additionally, Smart Finsec has underperformed against the Sensex over the past year, with a return of -6.93% compared to the Sensex's 5.31%, highlighting the potential misalignment in its current valuation.