Is REC Ltd overvalued or undervalued?

As of 17 October 2025, the valuation grade for REC Ltd has moved from attractive to expensive, indicating a shift in perception regarding its market value. The company is currently deemed overvalued. Key ratios include a PE ratio of 5.84, an EV to EBITDA of 10.51, and a PEG ratio of 0.38, which suggest that despite a relatively low PE ratio, the overall valuation metrics are not favorable compared to its peers. When comparing REC Ltd to its industry peers, Bajaj Finance is categorized as very expensive with a PE ratio of 38.21, while Life Insurance stands out as very attractive with an EV to EBITDA of 8.94. This peer comparison highlights that REC Ltd's valuation is not competitive, especially given its recent stock performance, which has underperformed the Sensex over the past year, declining by 30.90% compared to the Sensex's 3.64% increase.