Is CSL Finance overvalued or undervalued?

As of 14 August 2025, CSL Finance has moved from an attractive to a very attractive valuation grade. The company is currently considered undervalued based on its key financial ratios, including a PE ratio of 9.24, an EV to EBIT of 7.80, and an ROE of 13.83%. 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, indicating that CSL Finance may offer a more favorable investment opportunity.
Additionally, CSL Finance's EV to EBITDA ratio of 7.71 is competitive when compared to the industry average, reinforcing its undervaluation status. Despite recent stock performance showing a decline of 4.21% year-to-date compared to a 3.15% gain in the Sensex, the long-term outlook remains strong with a remarkable 441.35% increase over the past five years. This suggests that CSL Finance may present a compelling investment opportunity for those looking at long-term growth in the non-banking financial sector.