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, all of which suggest that the stock is trading at a discount compared to its earnings growth potential.
In comparison to its peers, Dhanlaxmi Bank stands out with its attractive valuation against HDFC Bank's expensive PE ratio of 21.37 and ICICI Bank's PE ratio of 19.79. Notably, while Dhanlaxmi Bank's return on equity (ROE) is relatively modest at 5.94%, it is still competitive within the sector, especially when considering the higher valuations of its peers. Recent performance shows that Dhanlaxmi Bank has outperformed the Sensex over the past week and month, reinforcing its attractive valuation narrative despite a challenging year-to-date return.