Is TCI Finance overvalued or undervalued?

As of 3 September 2025, the valuation grade for TCI Finance has moved from very expensive to risky, indicating a significant shift in perception regarding its market value. The company appears to be undervalued, especially when considering its low PE ratio of 4.91 and a PEG ratio of just 0.01, which suggests that the stock may be trading at a discount relative to its growth potential. However, the negative price to book value of -0.23 and the negative EV to EBIT and EV to EBITDA ratios of -5.50 raise concerns about the company's financial health.
In comparison to its peers, TCI Finance's valuation metrics stand out. For instance, Bajaj Finance has a PE ratio of 32.03, while Life Insurance boasts a PE of 11.31, highlighting how TCI Finance is trading at a fraction of the valuation of these competitors. Despite recent stock performance showing a decline of 29.11% year-to-date compared to a 3.11% increase in the Sensex, the long-term returns of 158.82% over three years suggest that the company may have potential for recovery. Overall, TCI Finance's current valuation indicates it is undervalued relative to its peers and historical performance.