Is DCB Bank overvalued or undervalued?

As of 1 July 2025, DCB Bank's valuation grade has moved from very attractive to attractive, indicating a shift in its perceived value. The bank is currently considered undervalued, supported by a PE ratio of 7.52, a price-to-book value of 0.81, and a PEG ratio of 0.53. In comparison, HDFC Bank and ICICI Bank are deemed expensive with PE ratios of 22.91 and 21.64, respectively, highlighting DCB Bank's relative affordability within the sector.
Additionally, DCB Bank's return on equity stands at 10.82%, and its net NPA to book value is 10.05%, which are competitive metrics compared to its peers. The bank's stock has outperformed the Sensex year-to-date, with a return of 21.57% compared to the Sensex's 7.11%. This performance, coupled with its attractive valuation ratios, reinforces the conclusion that DCB Bank is undervalued in the current market landscape.