Is Axis Bank overvalued or undervalued?

As of 8 August 2025, Axis Bank's valuation grade has moved from fair to attractive, indicating a positive shift in its perceived value. The bank is currently considered undervalued, with a price-to-earnings (PE) ratio of 12.54, a price-to-book value of 1.77, and a return on equity (ROE) of 14.15%. In comparison to its peers, HDFC Bank and ICICI Bank are deemed expensive with PE ratios of 21.84 and 20.93, respectively, highlighting Axis Bank's relative attractiveness in the market.
The bank's net non-performing assets (NPA) to book value stands at 2.74%, which is a manageable level, further supporting its valuation. Despite a recent decline in stock performance compared to the Sensex, with a year-to-date return of -1.04% against the Sensex's 2.20%, the long-term outlook remains strong, evidenced by a 5-year return of 144.08%. Overall, Axis Bank presents a compelling investment opportunity at its current valuation.