Is Dhanlaxmi Bank overvalued or undervalued?

As of 4 September 2025, Dhanlaxmi Bank's valuation grade has moved from very attractive to attractive, indicating a shift in its perceived value. The bank is currently considered undervalued, with a PE ratio of 11.42, a price-to-book value of 0.71, and a PEG ratio of 0.07. These figures suggest that the bank is trading at a discount compared to its earnings growth potential.
In comparison to its peers, Dhanlaxmi Bank's valuation stands out, especially against HDFC Bank and ICICI Bank, which are deemed expensive with PE ratios of 21.28 and 20.5, respectively. Additionally, Axis Bank, which is also attractive, has a PE ratio of 12.47, further highlighting Dhanlaxmi's relative undervaluation. Despite recent underperformance against the Sensex, with a year-to-date return of -19.67% compared to the Sensex's 3.30%, the bank's strong ratios suggest it may present a buying opportunity for investors looking for value in the private banking sector.