Is HUDCO overvalued or undervalued?

As of 25 June 2025, HUDCO's valuation grade has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently considered overvalued. Key ratios include a PE ratio of 17.70, an EV to EBITDA of 14.98, and a PEG ratio of 0.63, which suggests that while the company is generating earnings, its growth potential may not justify its current price.
In comparison to its peers, HUDCO's PE ratio is notably higher than LIC Housing Finance's very attractive PE of 6.17 and PNB Housing's fair PE of 14.64, indicating that HUDCO is trading at a premium despite its lower return on capital employed (ROCE) of 8.26% compared to the industry average. Additionally, HUDCO's recent stock performance has outpaced the Sensex over the past week and month, but its year-to-date return of 2.02% lags behind the Sensex's 5.91%, further reinforcing the notion of overvaluation.