Is Usha Financial overvalued or undervalued?

As of 29 August 2025, Usha Financial's valuation grade has moved from attractive to fair, indicating a shift in market perception. The company is currently fairly valued, with a PE ratio of 13.31, an EV to EBITDA of 9.97, and a ROCE of 17.48%. In comparison to its peers, Bajaj Finance is considered very expensive with a PE ratio of 31.3, while Life Insurance is very attractive with a PE of 11.08, highlighting Usha Financial's relative positioning within the industry.
Despite the fair valuation, Usha Financial has underperformed in the market, showing a year-to-date return of -29.58% compared to a positive 3.31% return for the Sensex. This underperformance may suggest that the market has not fully recognized the company's potential, especially given its solid ROCE and reasonable valuation ratios compared to peers.