Is Sundaram Finance overvalued or undervalued?

As of 30 October 2025, Sundaram Finance's valuation grade has moved from fair to expensive, indicating that the company is currently overvalued. Key financial ratios include a PE Ratio of 26.52, an EV to EBITDA of 15.56, and a ROE of 14.24%. Compared to peers, Bajaj Finance is very expensive with a PE of 37.56, while Life Insurance stands out as very attractive with a PE of 11.69.
In light of these comparisons, Sundaram Finance appears overvalued in its sector, particularly against peers such as Bajaj Finserv, which also carries an expensive valuation with a PE of 35.5. Although the company's stock has outperformed the Sensex over the last three years, the current valuation metrics suggest that investors may be paying a premium for the stock, which does not align with its financial performance.