Is HDFC Life Insur. overvalued or undervalued?

As of 17 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 87.81, a Price to Book Value of 9.69, and an EV to EBITDA of 175.39. Compared to its peers, Bajaj Finance is considered very expensive with a PE of 35.94, while SBI Life Insurance is very attractive with a PE of 72.82, indicating that HDFC Life is positioned in a more reasonable valuation range relative to its competitors.
Despite the fair valuation, HDFC Life's recent stock performance has been mixed, with a year-to-date return of 24.17%, significantly outperforming the Sensex's 5.83% during the same period. However, over the past year, the stock has only returned 9.39%, while the Sensex has slightly declined by 0.46%. This context suggests that while the company is fairly valued, its growth potential may be tempered compared to the broader market trends.