Is HUDCO overvalued or undervalued?

As of 10 October 2025, HUDCO's valuation grade has moved from fair to very expensive, indicating a significant shift in its market positioning. The company is currently considered overvalued based on its financial metrics. Key ratios include a PE ratio of 16.77, an EV to EBIT of 13.95, and a PEG ratio of 0.68, which suggests that while the company is generating earnings, its growth potential may not justify the current price.
In comparison to its peers, HUDCO's valuation stands out as relatively high. For instance, LIC Housing Finance, rated attractive, has a PE ratio of 5.68, while PNB Housing, categorized as expensive, has a PE of 10.92. This stark contrast highlights that HUDCO's valuation may not be supported by its earnings growth relative to its competitors. Additionally, HUDCO's recent stock performance has been underwhelming, with a year-to-date return of -0.75%, compared to the Sensex's 5.58%, further reinforcing the notion that it is overvalued in the current market environment.