Is HDFC Life Insur. overvalued or undervalued?

Jun 22 2025 08:02 AM IST
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As of June 20, 2025, HDFC Life Insurance is considered overvalued with a PE ratio of 92.73 and a price of 779.35, significantly higher than its peers and the industry average, indicating that its current valuation may not be justified.
As of 20 June 2025, HDFC Life Insurance has moved from a fair valuation to an expensive one. The company is currently overvalued, with a PE ratio of 92.73, a Price to Book Value of 10.39, and an EV to EBIT of 204.57. In comparison to its peers, HDFC Life's valuation metrics are significantly higher; for instance, SBI Life Insurance is considered very attractive with a PE ratio of 74.92, while the average PE ratio for the industry stands at 12.26.

Despite recent stock performance showing a return of 32.1% over the past year compared to the Sensex's 6.36%, the high valuation ratios suggest that HDFC Life Insurance is not justified at its current price of 779.35. The company's PEG ratio of 6.25 further indicates that growth expectations may be overly optimistic relative to its earnings potential. Overall, the valuation metrics and peer comparisons point to HDFC Life Insurance being overvalued in the current market context.
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