Is Dhanlaxmi Bank overvalued or undervalued?

As of 16 October 2025, Dhanlaxmi Bank's valuation grade has moved from attractive to very attractive, indicating a significant improvement in its valuation outlook. The bank is currently considered undervalued, with a PE ratio of 11.41, a price-to-book value of 0.70, and a PEG ratio of just 0.07, which suggests that the stock is trading at a substantial discount relative to its growth potential.
In comparison to its peers, Dhanlaxmi Bank stands out with its favorable ratios, especially when contrasted with HDFC Bank's PE ratio of 22.03 and ICICI Bank's PE ratio of 20.69, both of which are categorized as expensive. The bank's net NPA to book value stands at 9.87%, which is manageable within the context of its valuation. While the stock has underperformed the Sensex in the short term, it has shown strong returns over the longer term, reflecting its potential for recovery and growth.