Is Sundaram Finance overvalued or undervalued?

As of 18 September 2025, Sundaram Finance's valuation grade has moved from expensive to fair, indicating a shift in its market perception. The company is currently fairly valued, with a PE ratio of 26.52, an EV to EBITDA ratio of 15.56, and a ROE of 14.24%. In comparison to peers, Bajaj Finance is considered very expensive with a PE ratio of 35.53, while Life Insurance stands out as very attractive with a PE ratio of 11.55.
The company's performance has been relatively strong, especially over the long term, with a 3-year return of 105.21%, significantly outperforming the Sensex's 41.08% over the same period. Overall, Sundaram Finance appears to be a solid investment opportunity within the Non-Banking Financial Company sector, balancing its fair valuation with competitive performance metrics.