Is Dhanlaxmi Bank overvalued or undervalued?

Sep 04 2025 08:05 AM IST
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As of September 3, 2025, Dhanlaxmi Bank is considered very attractive and undervalued with a PE ratio of 11.33 and a price to book value of 0.70, despite a year-to-date decline of 20.08%, indicating strong growth potential compared to more expensive peers like HDFC Bank and ICICI Bank.
As of 3 September 2025, the valuation grade for Dhanlaxmi Bank has moved from attractive to very attractive. The bank is currently considered undervalued, with a PE ratio of 11.33, a price to book value of 0.70, and a PEG ratio of 0.07, indicating strong growth potential relative to its price. In comparison, HDFC Bank and ICICI Bank are both classified as expensive, with PE ratios of 21.14 and 20.37, respectively, highlighting Dhanlaxmi Bank's relative value in the sector.

Despite recent stock performance showing a decline of 20.08% year-to-date, compared to a 3.11% increase in the Sensex, the underlying financial ratios suggest that Dhanlaxmi Bank is positioned well for future growth. With a net NPA to book value of 9.87% and a ROE of 6.18%, the bank demonstrates solid fundamentals that support its undervaluation in the current market.
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Our weekly and monthly stock recommendations are here
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