Is HDB FINANC SER overvalued or undervalued?

As of 10 October 2025, HDB Financial Services has moved from a fair to an expensive valuation grade. The company is currently considered overvalued based on its key financial ratios, including a PE ratio of 28.08, an EV to EBITDA ratio of 46.59, and a ROE of 13.85%. In comparison to its peers, Bajaj Finance is rated as very expensive with a PE of 36.56, while Life Insurance stands out as very attractive with a PE of 11.65, highlighting the relative overvaluation of HDB Financial Services.
The company's performance has lagged behind the Sensex, with a 1-week return of -2.72% compared to the Sensex's 1.59% gain. This underperformance, combined with its high valuation metrics, reinforces the conclusion that HDB Financial Services is overvalued in the current market environment.