Is Reliance Home overvalued or undervalued?

As of 29 August 2025, the valuation grade for Reliance Home has moved from risky to attractive, indicating a significant improvement in its perceived value. Despite this positive shift, the company appears to be undervalued based on its current financial metrics. Key ratios include a PE ratio of -66.68, an EV to EBIT of -96.17, and an EV to Sales of 310.63, all of which reflect substantial challenges in profitability and valuation.
In comparison to its peers, Reliance Home's valuation metrics are starkly lower. For instance, HUDCO has a PE ratio of 14.73 and an EV to EBITDA of 13.42, while LIC Housing Finance shows a PE of 5.55 and an EV to EBITDA of 11.16. These comparisons highlight that Reliance Home is trading at a significant discount relative to its peers, reinforcing the notion that it is undervalued. Notably, the company's stock has outperformed the Sensex over the past year, with a return of 31.04% compared to the Sensex's -2.83%, further supporting the attractiveness of its current valuation.