Is Equitas Sma. Fin overvalued or undervalued?

As of 17 June 2025, the valuation grade for Equitas Small Finance has moved from expensive to fair. The company is currently fairly valued, with a PE ratio of 51.72, a price-to-book value of 1.25, and a PEG ratio of 0.00. In comparison, HDFC Bank and ICICI Bank, both classified as expensive, have PE ratios of 21.95 and 21.51, respectively, highlighting the relative valuation of Equitas within its peer group.
Despite its fair valuation, Equitas has shown mixed performance against the Sensex, with a year-to-date return of 3.96% compared to the Sensex's 4.41%. However, over the past year, the stock has underperformed significantly, with a return of -34.53% against the Sensex's 5.96%. This suggests that while the current valuation is fair, the stock's recent performance may warrant caution for potential investors.