Is Sundaram Finance overvalued or undervalued?

Aug 21 2025 08:02 AM IST
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As of August 20, 2025, Sundaram Finance is considered very expensive and overvalued with a PE ratio of 29.96, a Price to Book Value of 4.36, and an EV to EBITDA of 16.50, especially when compared to industry peers like Bajaj Finance and Life Insurance, despite its strong year-to-date stock performance of 24.59% versus the Sensex's 4.76%.
As of 20 August 2025, Sundaram Finance's valuation grade has moved from expensive to very expensive, indicating a significant increase in perceived valuation. The company is currently considered overvalued. Key ratios include a PE ratio of 29.96, a Price to Book Value of 4.36, and an EV to EBITDA of 16.50, all of which suggest a premium valuation compared to its peers.

In comparison with its industry peers, Bajaj Finance has a higher PE ratio of 31.66, while Life Insurance stands out as very attractive with a PE of 11.68. This highlights Sundaram Finance's elevated valuation relative to more favorably priced competitors. Additionally, the company's recent stock performance has outpaced the Sensex, with a year-to-date return of 24.59% compared to the Sensex's 4.76%, reinforcing the notion of its overvaluation despite strong market performance.
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