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The market asks roughly as much of Axis Bank as of HDFC Bank.
At current prices, buyers of Axis Bank are assuming about 14.5% return on equity against 14.3% in its own record; for HDFC Bank it is 15.0% against 15.1%. That shows which share needs more to go right — not which is cheaper. How far each trades from its estimated fair value is in the full valuations.
- Valuation method: both on excess return.
- Size: HDFC Bank is worth about 3.0 times Axis Bank on the stock market.
- Record: HDFC Bank has grown revenue faster: Axis Bank compounded at about 13% a year (FY2019–FY2026) and HDFC Bank at about 22% (FY2019–FY2026).
- What to watch: closing the return gap at Axis Bank; return on equity at HDFC Bank.
| Axis Bank | HDFC Bank | |
|---|---|---|
| Price | ₹1,331 | ₹804 |
| Market cap | ₹4.14L Cr | ₹12.40L Cr |
| P/E | 13.8 | 15.5 |
| P/B | 1.94 | 2.13 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Excess return | Excess return |
01Two businesses
From UTI Bank to a top-three private lender
Axis Bank started life in 1993 as UTI Bank, set up by the Unit Trust of India and other state-owned institutions, and took its current name in 2007. It lends to large corporates, small businesses and households, and runs one of the largest credit-card businesses in India.
India's largest private bank, reshaped by a merger
HDFC Bank is India's largest private-sector bank, built on retail lending, low-cost current and savings deposits and a long record of keeping bad loans low. In July 2023 it merged with HDFC Ltd, the housing-finance company that founded it, adding a large home-loan book and bringing the group's life insurer, general insurer and asset manager under the bank.
02The records side by side
HDFC Bank has grown revenue faster: Axis Bank compounded at about 13% a year (FY2019–FY2026) and HDFC Bank at about 22% (FY2019–FY2026). By revenue, HDFC Bank is about 3.1 times the size of Axis Bank. Axis Bank kept 16.3% of revenue as net profit in FY2026; HDFC Bank kept 15.3% of revenue as net profit in FY2026.
Full ten-year tables and charts are on each company's page: Axis Bank · HDFC Bank.
03What each price assumes
Work backwards from each share price and you can see what buyers are taking for granted — the rate each company must sustain to justify what it costs, against what its own record supports.
04What decides each one's value
- Closing the return gapAxis has earned less on its equity than the two largest private banks. How much of that gap closes is the heart of its valuation.
- Deposit franchiseGrowing low-cost deposits is the cheapest way to lift margins.
- Return on equityA bank is worth more than its book only to the extent it earns above its cost of equity. The 'what each price assumes' figure above shows how much return today's price already takes for granted.
- Deposit growthHow fast it gathers cheap deposits sets how fast it can lend without pushing up its funding costs.
05What could go wrong
- Corporate creditAxis has had a more volatile corporate-loan record than its closest peers.
- Unsecured lendingCards and personal loans are the first place a consumer slowdown shows up.
- Slower growth for longerIf the deposit catch-up takes longer, loan growth stays below its historical pace.
- Interest-rate cutsFalling rates can squeeze lending margins before deposit costs adjust.
06Which is better value?
Sign in free to see which trades further below its worth
- ✓Both fair values per share — each on the method that fits the business
- ✓Every step of both workings — growth, margins and cost of capital, with sources
- ✓Bull, base and bear cases — for each company
- ✓Downloadable reports — the full write-up for each, yours to keep
08Questions people ask
Is Axis Bank or HDFC Bank better value?
That turns on how far each share trades from its estimated fair value. Both figures, with every step of the working, are in the full valuations, free to view once you sign in. On the public numbers, Axis Bank trades at 13.8 times earnings and 1.94 times book value, and HDFC Bank at 15.5 times earnings and 2.13 times book value — but multiples alone mislead when two businesses work differently, which is why each is valued on the method that fits it.
What is the difference between Axis Bank and HDFC Bank?
Axis Bank started life in 1993 as UTI Bank, set up by the Unit Trust of India and other state-owned institutions, and took its current name in 2007. HDFC Bank is India's largest private-sector bank, built on retail lending, low-cost current and savings deposits and a long record of keeping bad loans low.
Are Axis Bank and HDFC Bank valued the same way?
Yes — both on excess return, so their workings compare like for like.
What does today's price assume for Axis Bank and HDFC Bank?
Worked backwards from the share price, Axis Bank needs about 14.5% return on equity and HDFC Bank about 15.0% return on equity, against 14.3% and 15.1% in their own records.