Is Indbank Merchant overvalued or undervalued?

As of 19 September 2025, the valuation grade for Indbank Merchant has moved from attractive to fair. The company is currently fairly valued, with a PE ratio of 19.23, an EV to EBITDA ratio of 5.44, and a ROE of 8.46%. In comparison to peers, Bajaj Finance is considered very expensive with a PE ratio of 35.51, while Life Insurance is very attractive with a PE ratio of 11.64, indicating that Indbank Merchant is positioned in a more moderate valuation range relative to its industry.
Despite the recent downgrade in valuation grade, Indbank Merchant has shown a strong return on capital employed at 388.04%. However, its year-to-date performance has been disappointing, with a decline of 27.49% compared to a 5.74% gain in the Sensex. This underperformance highlights the challenges the company faces, although its valuation metrics suggest it is not overvalued relative to its peers.