Is CSL Finance overvalued or undervalued?

As of 20 October 2025, CSL Finance's valuation grade has moved from very attractive to attractive, indicating a shift in market perception. The company is currently considered undervalued, with a PE ratio of 8.72, an EV to EBIT of 7.57, and a PEG ratio of 0.95. These figures suggest that CSL Finance is trading at a lower valuation compared to its peers, particularly when compared to Bajaj Finance, which has a significantly higher PE ratio of 38.6, and Bajaj Finserv, with a PE of 35.87.
In the context of its industry, CSL Finance's valuation metrics reflect a favorable position, especially against peers like Life Insurance, which has a PE of 11.57, and I R F C, which is also rated as attractive. Despite recent underperformance relative to the Sensex, particularly over the past year with a decline of 28.58% compared to the Sensex's 3.86% gain, the long-term outlook remains positive, as evidenced by a remarkable 299.19% return over the past five years. This suggests potential for recovery and growth in the future.