Is Karur Vysya Bank overvalued or undervalued?

As of 4 July 2025, the valuation grade for Karur Vysya Bank has moved from fair to expensive, indicating a shift in perception regarding its market value. The bank is currently considered overvalued. Key ratios include a PE ratio of 11.26, a Price to Book Value of 1.83, and a PEG ratio of 0.54, which suggest that while the bank has a relatively low earnings multiple, its valuation does not align favorably compared to its peers.
In comparison with notable peers, HDFC Bank has a significantly higher PE ratio of 22.65, while ICICI Bank stands at 21.8, both indicating a premium valuation in the sector. Additionally, Axis Bank, another competitor, has a PE ratio of 13.83, which is still above that of Karur Vysya Bank. Despite the recent strong stock performance, with a year-to-date return of 25.71% compared to the Sensex's 6.77%, the current valuation suggests that investors may be paying too much for the stock at this time.