Is REC Ltd overvalued or undervalued?

As of 10 October 2025, the valuation grade for REC Ltd has moved from very attractive to fair. The company is currently fairly valued. Key ratios include a PE ratio of 5.82, a Price to Book Value of 1.25, and an EV to EBIT of 10.51. In comparison to peers, Bajaj Finance is very expensive with a PE ratio of 36.56, while Life Insurance is very attractive with an EV to EBITDA of 9.08. Despite REC Ltd's current valuation, it has underperformed relative to the Sensex, with a year-to-date return of -25.48% compared to the Sensex's 5.58%. This underperformance, coupled with its fair valuation, suggests that while the stock may not be undervalued, it also lacks the appeal of its more expensive peers in the finance sector.