Is Dhanlaxmi Bank overvalued or undervalued?

Nov 14 2025 08:11 AM IST
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As of November 13, 2025, Dhanlaxmi Bank is fairly valued with a PE ratio of 12.76 and a price to book value of 0.76, but it has underperformed the Sensex year-to-date with a return of -12.95%, raising concerns about its low ROE of 5.94% and high net NPA to book value of 10.08%.
As of 13 November 2025, Dhanlaxmi Bank's valuation grade has moved from attractive to fair, indicating a shift in its market perception. The bank is currently fairly valued, with a PE ratio of 12.76, a price to book value of 0.76, and a PEG ratio of 0.10. In comparison to its peers, HDFC Bank and ICICI Bank are considered expensive with PE ratios of 21.33 and 19.99, respectively, highlighting Dhanlaxmi Bank's relative valuation attractiveness.

Despite its fair valuation, Dhanlaxmi Bank has shown mixed performance against the Sensex, with a year-to-date return of -12.95% compared to the Sensex's 8.11%. This underperformance over the year contrasts with its strong 3-year return of 92.37%, suggesting potential volatility. Overall, while the bank is currently fairly valued, its low ROE of 5.94% and high net NPA to book value of 10.08% raise concerns about its operational efficiency and asset quality.
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