Is HDFC Life Insur. overvalued or undervalued?

Sep 11 2025 08:06 AM IST
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As of September 10, 2025, HDFC Life Insurance is considered overvalued with a PE ratio of 89.10 and a high PEG ratio of 6.08, despite a 10.48% return over the past year, indicating that its valuation may not be justified by its financial performance and growth prospects.
As of 10 September 2025, HDFC Life Insurance has moved from a fair to an expensive valuation grade. The company is currently overvalued, with a PE ratio of 89.10, a price to book value of 9.83, and an EV to EBITDA ratio of 177.93. These figures indicate a significant premium compared to its peers, such as Bajaj Finance, which has a PE ratio of 34.56, and SBI Life Insurance, which boasts a more attractive PE of 73.93.

In terms of performance, HDFC Life's return over the past year stands at 10.48%, outpacing the Sensex's decline of 0.61%. However, the company's high PEG ratio of 6.08 and low dividend yield of 0.27% further emphasize its expensive valuation. Overall, the metrics suggest that HDFC Life Insurance is trading at a level that may not be justified by its current financial performance and growth prospects.
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