Is City Union Bank overvalued or undervalued?

As of 31 July 2025, the valuation grade for City Union Bank has moved from fair to expensive, indicating a shift in its perceived value. The bank is currently considered overvalued based on key financial ratios, with a PE ratio of 13.98, a Price to Book Value of 1.66, and a PEG ratio of 1.32. In comparison to its peers, HDFC Bank has a significantly higher PE ratio of 22.34, while Axis Bank is more attractively priced with a PE of 12.68.
City Union Bank's return metrics also reflect a mixed performance against the Sensex, with a year-to-date return of 22.86% compared to the Sensex's 3.90%. Despite this strong performance, the overall valuation suggests that the stock is currently overvalued, especially when compared to its peers in the private sector banking industry.