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 that the stock is currently overvalued. The bank's price-to-earnings (PE) ratio stands at 11.26, while its price-to-book value is at 1.83, and it has a PEG ratio of 0.54. These figures suggest that, despite a reasonable earnings multiple, the stock's valuation does not justify its current price when compared to its peers.
In the peer comparison, HDFC Bank has a significantly higher PE ratio of 22.65, while ICICI Bank's PE stands at 21.8, both indicating a premium valuation in the sector. Meanwhile, Axis Bank, with a PE of 13.83, is closer to Karur Vysya Bank but still reflects a more attractive valuation. Notably, Karur Vysya Bank has outperformed the Sensex in various time frames, including a 31.91% return over the past year compared to the Sensex's 4.23%, reinforcing the notion that the stock may be overvalued given its current market price.