Is GSB Finance overvalued or undervalued?

As of 18 July 2025, GSB Finance's valuation grade has moved from very expensive to expensive, indicating a slight improvement in its perceived value. The company is currently considered overvalued based on its financial ratios, with a PE ratio of 19.19, an EV to EBIT of 19.02, and a Price to Book Value of 1.33. These metrics suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, GSB Finance's PE ratio is significantly higher than Life Insurance, which stands at 12.08, and Bajaj Finserv at 36.56, highlighting its relatively expensive valuation within the sector. Additionally, the company's ROCE of 6.19% and ROE of 4.52% further emphasize the challenges it faces in generating returns relative to its valuation. Despite a strong one-year stock return of 83.01% compared to the Sensex's 0.51%, the overall financial indicators suggest that GSB Finance remains overvalued in the current market context.