Is Indbank Merchant overvalued or undervalued?

As of 1 July 2025, the valuation grade for Indbank Merchant has moved from fair to attractive, indicating a positive shift in its perceived value. The company is currently assessed as undervalued. Key ratios include a PE ratio of 18.60, an EV to EBITDA of 6.98, and a remarkable ROCE of 116.78%.
In comparison to its peers, Indbank Merchant's PE ratio is significantly lower than that of Bajaj Finance, which stands at 34.98, and Bajaj Finserv at 36.92, both categorized as very expensive. Additionally, while Life Insurance is rated fair with a PE of 12.71, Indbank's attractive valuation suggests it offers better value in the current market. Notably, despite a year-to-date decline of 23.43%, the company has outperformed the Sensex over a three-year period with a return of 89.12%.