Is CSB Bank overvalued or undervalued?

As of 20 October 2025, CSB Bank's valuation grade has moved from fair to expensive, indicating a shift in its market perception. The bank appears to be overvalued at its current price of 423.90, especially when considering its PE ratio of 12.28, a Price to Book Value of 1.64, and a PEG ratio of 1.31. These figures suggest that the stock is trading at a premium compared to its earnings growth potential.
In comparison to its peers, CSB Bank's PE ratio is significantly lower than that of HDFC Bank, which stands at 21.67, and ICICI Bank, which has a PE ratio of 20.06. Additionally, while CSB Bank has a net NPA to book value ratio of 4.78%, it is essential to note that other banks in the sector, such as Axis Bank and Yes Bank, are also categorized as expensive, but with higher valuations. Despite CSB Bank's strong recent stock performance, outperforming the Sensex over various periods, the current valuation suggests that it may not be a favorable investment at this time.