Is HDFC Life Insur. overvalued or undervalued?

As of 4 September 2025, HDFC Life Insurance has moved from an expensive to a fair valuation grade. The company is currently fairly valued, with a PE ratio of 86.54, a Price to Book Value of 9.55, and an EV to EBITDA of 172.88. In comparison to its peers, Bajaj Finance is very expensive with a PE of 33.36, while SBI Life Insurance is very attractive with a PE of 72.29, highlighting the relative positioning of HDFC Life within the industry.
Despite its fair valuation, HDFC Life's return metrics show some volatility; over the past year, it has underperformed the Sensex with a return of -0.59% compared to -1.98% for the index. However, on a year-to-date basis, it has outperformed the Sensex with a return of 22.22% versus 3.30%. Overall, while HDFC Life is currently fairly valued, its high ratios suggest that it may still face challenges in justifying its valuation in the long term.