Is HDB FINANC SER overvalued or undervalued?

Sep 01 2025 08:11 AM IST
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As of August 29, 2025, HDB Financial Services is considered overvalued with a valuation grade of "expensive," reflected by its high PE ratio of 29.67 and EV to EBITDA of 47.69, compared to peers like Bajaj Finance and Life Insurance, and despite a recent 4.44% return, it underperforms against the Sensex's 2.14% YTD return.
As of 29 August 2025, the valuation grade for HDB Financial Services has moved from does not qualify to expensive. This indicates that the company is currently overvalued. The key ratios reflect this assessment, with a PE ratio of 29.67, an EV to EBITDA of 47.69, and a Price to Book Value of 4.11, which are significantly higher than many peers in the industry.

In comparison to its peers, Bajaj Finance has a PE ratio of 31.3 and an EV to EBITDA of 17.84, while Life Insurance presents a much more attractive valuation with a PE of 11.08 and an EV to EBITDA of 8.57. These comparisons highlight that HDB Financial Services is trading at a premium relative to its peers. Additionally, while the stock has shown a 4.44% return over the past month, it still lags behind the Sensex's 2.14% YTD return, reinforcing the notion that the stock may not be a compelling investment at its current valuation.
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