Is Dhanlaxmi Bank overvalued or undervalued?

As of 14 November 2025, Dhanlaxmi Bank's valuation grade has moved from fair to attractive, indicating a positive shift in its perceived value. The bank is currently considered undervalued, with a PE ratio of 12.66, a price-to-book value of 0.75, and a PEG ratio of 0.10, which suggests that the stock is trading at a discount compared to its growth prospects.
In comparison to its peers, Dhanlaxmi Bank stands out with a significantly lower PE ratio than HDFC Bank at 21.37 and ICICI Bank at 19.79, both of which are classified as expensive. Additionally, the bank's return on equity (ROE) is 5.94%, while its net NPA to book value is 10.08%, which reflects its risk profile. Despite a challenging year-to-date performance of -13.66% compared to the Sensex's 8.22%, the long-term outlook remains promising, especially with a 5-year return of 120.77% against the Sensex's 93.78%.