Is Five-Star Bus.Fi overvalued or undervalued?

As of 29 August 2025, the valuation grade for Five-Star Bus.Fi has moved from attractive to very attractive, indicating a stronger position in the market. The company is currently undervalued based on its financial metrics. Key ratios include a PE ratio of 14.87, an EV to EBIT of 10.31, and a PEG ratio of 0.76, which suggests that the stock is priced favorably relative to its earnings growth potential.
In comparison to its peers, Five-Star Bus.Fi's PE ratio is significantly lower than Bajaj Finance's 31.3, which is classified as very expensive, and Life Insurance's 11.08, which is very attractive. Additionally, the company's ROCE and ROE stand at 17.23% and 17.25%, respectively, indicating strong profitability. Despite recent underperformance against the Sensex, with a year-to-date return of -28.69% compared to the Sensex's 2.14%, the valuation metrics suggest that Five-Star Bus.Fi presents a compelling investment opportunity at its current price of 549.00.