Is Sundaram Finance overvalued or undervalued?

As of 4 November 2025, Sundaram Finance's valuation grade has moved from fair to attractive, indicating a positive shift in its market perception. The company is currently assessed as undervalued based on its financial ratios. Key metrics include a PE ratio of 26.89, an EV to EBITDA of 13.95, and a Price to Book Value of 0.35, which suggest that the stock is trading at a reasonable valuation compared to its earnings and assets.
In comparison to its peers, Sundaram Finance's PE ratio is significantly lower than Bajaj Finance's 37.67 and Bajaj Finserv's 34.81, both of which are categorized as very expensive. Additionally, its EV to EBITDA is more favorable than that of Bajaj Finance and HDFC Life Insurance, which stands at 98.83, indicating that Sundaram Finance offers a more attractive investment opportunity within the Non-Banking Financial Company sector. Notably, Sundaram Finance has outperformed the Sensex over the past year, with a stock return of -3.94% compared to the Sensex's 5.94%, reinforcing its potential as a value investment.