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 considered overvalued. Key ratios include a PE Ratio of 5.84, an EV to EBITDA of 10.51, and a Dividend Yield of 5.10%. In comparison to its peers, REC Ltd's PE Ratio of 5.84 is significantly lower than Bajaj Finance's 38.21, which is categorized as very expensive, while Life Insurance, rated very attractive, has an EV to EBITDA of 8.94. Despite REC Ltd's strong ROE of 20.27%, its recent stock performance has lagged behind the Sensex, with a year-to-date return of -25.14% compared to the Sensex's 7.44%.