Is REC Ltd overvalued or undervalued?

As of 12 November 2025, REC Ltd's valuation grade has moved from fair to expensive, indicating a shift in its market perception. The company is currently considered overvalued. Key ratios include a PE ratio of 5.52, an EV to EBITDA of 10.54, and a PEG ratio of 0.35, which suggests that despite a low PE ratio, the overall valuation metrics are not favorable when compared to its peers.
In comparison to its peers, REC Ltd's PE ratio is significantly lower than Bajaj Finance's 34.41 and Bajaj Finserv's 33.6, both of which are categorized as expensive. Meanwhile, Life Insurance stands out as very attractive with a PE of 11.14. Additionally, REC Ltd has underperformed against the Sensex, with a year-to-date return of -27.65% compared to the Sensex's 8.10%, reinforcing the notion that the stock is currently overvalued.