Is REC Ltd overvalued or undervalued?

As of 14 November 2025, the valuation grade for REC Ltd has moved from fair to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued. Key ratios include a PE ratio of 5.46, an EV to EBITDA of 10.52, and a PEG ratio of 0.34, which suggest that despite a relatively low PE, the overall valuation metrics indicate a premium compared to its peers.
In comparison to its industry peers, REC Ltd's valuation appears high, especially when juxtaposed with Bajaj Finance, which has a PE ratio of 34.62, and Life Insurance, which is deemed very attractive with an EV to EBITDA of 9.29. The recent performance of REC Ltd shows a significant decline, with a year-to-date return of -28.44%, contrasting sharply with the Sensex's positive return of 8.22% over the same period, reinforcing the notion that the stock is currently overvalued.