Is TCI Finance overvalued or undervalued?

As of 23 October 2025, TCI Finance's valuation grade has moved from very expensive to risky, indicating a significant shift in its market perception. The company appears to be undervalued, especially when considering its low PE ratio of 4.47 and negative Price to Book Value of -0.21. Additionally, the EV to EBIT and EV to EBITDA ratios both stand at -5.01, suggesting that the market may not be fully recognizing the company's potential.
In comparison to its peers, TCI Finance's valuation metrics are starkly lower, with Bajaj Finance having a PE ratio of 39.07 and an EV to EBITDA of 20.55, while Life Insurance boasts a PE of 11.68 and an EV to EBITDA of 9.11. This stark contrast highlights TCI Finance's undervaluation relative to its industry. Furthermore, the company's recent stock performance has lagged behind the Sensex, with a year-to-date return of -35.50% compared to the Sensex's 8.21%, reinforcing the notion that the stock may be undervalued in the current market environment.