Is Power Fin.Corpn. overvalued or undervalued?

As of 21 May 2025, the valuation grade for Power Fin. Corpn. has moved from very attractive to attractive. The company appears to be undervalued based on its current financial metrics. Key ratios include a PE ratio of 6.01, a Price to Book Value of 1.17, and a PEG ratio of 0.37, which are significantly lower than its peers. For instance, Life Insurance has a PE ratio of 12.54, indicating that Power Fin. Corpn. is trading at a much lower valuation relative to its earnings.
In comparison to its peers, Power Fin. Corpn.'s EV to EBITDA stands at 10.66, while Bajaj Finance, categorized as very expensive, has an EV to EBITDA of 19.51. Additionally, the company's dividend yield of 3.87% is attractive in the current market environment. Despite a recent decline in stock performance compared to the Sensex over the past year, the long-term returns of 549.13% over five years suggest strong underlying growth potential, reinforcing the view that the stock is undervalued.