Is HDFC Bank overvalued or undervalued?

Jun 09 2025 03:52 PM IST
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As of May 5, 2025, HDFC Bank is considered overvalued with a PE ratio of 22.51 and a current price of 1981.10, despite a strong stock return of 25.92% over the past year, indicating a shift in valuation from very expensive to expensive compared to its peers.
As of 5 May 2025, HDFC Bank's valuation grade has moved from very expensive to expensive, indicating a shift in market perception. The bank is currently considered overvalued based on its key financial ratios, including a PE ratio of 22.51, a Price to Book Value of 3.05, and a PEG ratio of 2.29. When compared to peers, ICICI Bank has a slightly lower PE ratio of 22.01, while Axis Bank is significantly lower at 14.05, highlighting HDFC Bank's premium valuation in the sector.

Despite its strong performance with a recent stock return of 25.92% over the past year compared to the Sensex's 7.65%, the elevated valuation ratios suggest that HDFC Bank may not offer sufficient upside potential at its current price of 1981.10. Overall, the analysis indicates that HDFC Bank is overvalued relative to its peers and market conditions.
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