Is Sundaram Finance overvalued or undervalued?

As of 31 October 2025, Sundaram Finance's valuation grade has moved from expensive to fair, indicating a more favorable assessment of its market position. The company is currently fairly valued based on its financial metrics, with a PE ratio of 26.11, an EV to EBITDA ratio of 15.45, and a PEG ratio of 1.14. These figures suggest that the company is priced reasonably in relation to its earnings growth potential.
In comparison to its peers, Sundaram Finance's valuation stands out against Bajaj Finance, which is deemed very expensive with a PE ratio of 37.23, and Life Insurance, which is very attractive with a PE ratio of 11.62. This peer comparison reinforces the notion that Sundaram Finance is fairly valued within its industry, particularly when considering its solid ROE of 14.24%. Notably, while the stock has underperformed the Sensex over the past year, it has significantly outpaced it over the last three and five years, reflecting a strong long-term growth trajectory.