Is DCB Bank overvalued or undervalued?

As of 5 May 2025, DCB Bank's valuation grade has moved from fair to very attractive, indicating a significant improvement in its perceived value. The bank is currently considered undervalued, especially when compared to its peers. Key ratios include a PE ratio of 7.50, a Price to Book Value of 0.81, and a PEG ratio of 0.53, all of which suggest that the bank is trading at a discount relative to its earnings and book value.
In comparison to its peers, DCB Bank's PE ratio stands in stark contrast to HDFC Bank and ICICI Bank, which have PE ratios of 22.51 and 22.01, respectively, categorizing them as expensive. Additionally, Bandhan Bank, another very attractive peer, has a PE ratio of 10.17, further emphasizing DCB Bank's undervaluation. Notably, DCB Bank has outperformed the Sensex over the year with a return of 11.90% compared to the Sensex's 7.62%, reinforcing the attractiveness of its current valuation.