Is CSL Finance overvalued or undervalued?

Aug 15 2025 08:04 AM IST
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As of August 14, 2025, CSL Finance is considered very attractive and undervalued with a PE ratio of 9.24, significantly lower than its peers, despite a year-to-date stock decline of -4.21%, supported by strong operational efficiency metrics like a ROCE of 13.88% and ROE of 13.83%.
As of 14 August 2025, CSL Finance's valuation grade has moved from attractive to very attractive, indicating a positive shift in its perceived value. The company is currently considered undervalued, with a PE ratio of 9.24, an EV to EBIT of 7.80, and an EV to EBITDA of 7.71. In comparison to its peers, CSL Finance's PE ratio is significantly lower than that of Life Insurance, which stands at 11.53, and Bajaj Finance, which is at 30.73, highlighting its relative value in the market.

Despite a recent decline in stock performance, with a year-to-date return of -4.21% compared to the Sensex's 3.15%, CSL Finance's strong ROCE of 13.88% and ROE of 13.83% suggest solid operational efficiency. The company's valuation metrics, alongside its favorable peer comparison, reinforce the conclusion that CSL Finance is undervalued in the current market landscape.
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