Is Dharani Finance overvalued or undervalued?

Oct 21 2025 08:07 AM IST
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As of October 20, 2025, Dharani Finance is considered an attractive investment due to its undervaluation indicated by a PE ratio of 10.25, strong growth potential, and a 49.68% return over the past year, outperforming the Sensex.
As of 20 October 2025, the valuation grade for Dharani Finance has moved from fair to attractive, indicating a positive shift in its perceived value. The company is currently considered undervalued based on its financial metrics. Key ratios include a PE ratio of 10.25, an EV to EBIT of 7.14, and a PEG ratio of 0.02, which suggests strong growth potential relative to its price.

In comparison to its peers, Dharani Finance's PE ratio is significantly lower than that of Bajaj Finance, which stands at 38.6, and also lower than Bajaj Finserv at 35.87. Additionally, Life Insurance, which is classified as very attractive, has a PE ratio of 11.57, further emphasizing Dharani Finance's undervaluation. Despite a recent decline in stock price, the company has outperformed the Sensex over the past year with a return of 49.68% compared to the Sensex's 3.86%, reinforcing its attractiveness as an investment opportunity.
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