Is Smart Finsec overvalued or undervalued?

As of 10 October 2025, Smart Finsec's valuation grade has moved from fair to very expensive, indicating a significant shift in its market perception. The company is currently assessed as overvalued, with a PE ratio of 29.95, an EV to EBIT of 19.81, and an EV to EBITDA of 19.28. These ratios suggest that the stock is trading at a premium compared to its earnings and cash flow generation capabilities.
In comparison to its peers, Smart Finsec's valuation metrics stand out, particularly against Bajaj Finance, which has a higher PE ratio of 36.56, and Life Insurance, which is valued more attractively with a PE of 11.65. The stark contrast in valuation highlights that Smart Finsec may not justify its current price level given its performance metrics. Additionally, the company's recent stock performance has lagged behind the Sensex, with a year-to-date return of -23.16% compared to the Sensex's 5.58%, reinforcing the notion of overvaluation.