Is Indbank Merchant overvalued or undervalued?

As of 10 October 2025, Indbank Merchant's valuation grade has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued, with a PE ratio of 24.87, an EV to EBITDA of 9.37, and a Price to Book Value of 2.10. These ratios suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Indbank Merchant's PE ratio is significantly lower than Bajaj Finance's 36.56 but higher than Life Insurance's attractive PE of 11.65. Additionally, the EV to EBITDA ratio of 9.37 is less favorable than Bajaj Finserv's 12.77, further supporting the conclusion of overvaluation. Notably, while Indbank has shown strong returns over the past five years, outperforming the Sensex, its recent year-to-date performance of -6.20% contrasts sharply with the Sensex's positive return of 5.58%, reinforcing concerns about its current valuation.