Almost everything is overpriced at the moment. Gruh trading at 17 times, Can Fin at 7 times, pnb housing at 9 times, IB Housing at 4 times, HDFC at 4.8 times, Repco at 4.6 times. Those that are comparatively cheaper are GIC, Dewan, LIC Housing. But if you look at overall growth, risk profile and loan book quality, Can Fin is only next to Gruh/HDFC which is reflecting in the price now. We talk about Gruh being extremely costly at 8-9 p/b few years back, and look where it is trading now. Yes, this is bull market which is giving these good companies such price multiples. Rationale - Good run way, almost certain growth, good mgmt, good loan book quality, sectoral tailwinds. One of the major reasons this is rising so fast is on-boarding of new big investors.
Range of valuation depends upon the macros. A good company with sectoral tailwinds in bear market may command 2-3 times book value and seem like pricey. The same company, with similar prospects, in maddening bull market might command 7-8 times and still seem to be okay. ‘Semantics (Context)’ matters!