Is REC Ltd overvalued or undervalued?

As of 17 October 2025, the valuation grade for REC Ltd has moved from attractive to expensive. This indicates that the company is currently overvalued. Key ratios supporting this assessment include a PE ratio of 5.84, an EV to EBITDA ratio of 10.51, and a PEG ratio of 0.38, which suggest that while the company may have strong earnings relative to its price, its valuation metrics are not favorable compared to its peers. In comparison to its peers, REC Ltd's valuation appears high, especially when contrasted with Life Insurance, which has a PE ratio of 11.49 and an EV to EBITDA of 8.94, indicating a more attractive valuation. Other peers like Bajaj Finance are categorized as very expensive with a PE ratio of 38.21, but they also operate in a different segment with different growth expectations. The recent performance of REC Ltd shows a significant decline of 30.90% over the past year, while the Sensex has only seen a 3.64% increase, further reinforcing the notion that REC Ltd is overvalued in the current market context.