Is Axis Bank overvalued or undervalued?

As of 28 April 2025, the valuation grade for Axis Bank has moved from fair to expensive. The company is currently considered overvalued based on its financial ratios and peer comparisons. Key ratios include a PE Ratio of 14.05, a Price to Book Value of 2.07, and a PEG Ratio of 2.51, which indicate that the stock is trading at a premium compared to its earnings growth potential.
In comparison to its peers, Axis Bank's PE Ratio is significantly lower than that of HDFC Bank at 22.51 and ICICI Bank at 22.01, both of which are also classified as expensive. This suggests that while Axis Bank may be overvalued, it is still more attractive relative to its immediate competitors. Additionally, Axis Bank has outperformed the Sensex in various time frames, including a year-to-date return of 14.27% compared to the Sensex's 5.60%, reinforcing the notion that despite its overvaluation, investor sentiment remains relatively strong.