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The market asks roughly as much of Bajaj Finance as of Cholamandalam Finance.
At current prices, buyers of Bajaj Finance are assuming about 24.9% return on equity against 20.1% in its own record; for Cholamandalam Finance it is 23.6% against 20.0%. 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: Bajaj Finance is worth about 4.4 times Cholamandalam Finance on the stock market.
- Record: Cholamandalam Finance has grown revenue faster: Bajaj Finance compounded at about 21% a year (FY2020–FY2026) and Cholamandalam Finance at about 24% (FY2019–FY2026).
- What to watch: return on equity at Bajaj Finance; loan growth at Cholamandalam Finance.
| Bajaj Finance | Cholamandalam Finance | |
|---|---|---|
| Price | ₹1,117 | ₹1,850 |
| Market cap | ₹6.95L Cr | ₹1.59L Cr |
| P/E | 32.0 | 25.0 |
| P/B | 6.10 | 5.21 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Excess return | Excess return |
01Two businesses
A lender built on the EMI
Bajaj Finance is India's largest non-bank consumer lender and part of the Bajaj Finserv group. It made its name financing consumer durables at the point of sale — the EMI on a phone or a fridge — and has grown into personal loans, small-business loans, loans against property, gold loans and, through its listed subsidiary Bajaj Housing Finance, home loans.
The Murugappa group's lender
Cholamandalam Investment and Finance, part of the Chennai-based Murugappa group, is one of India's largest non-bank lenders. Its core is vehicle finance — new and used cars, commercial vehicles and tractors — especially in smaller towns.
02The records side by side
Cholamandalam Finance has grown revenue faster: Bajaj Finance compounded at about 21% a year (FY2020–FY2026) and Cholamandalam Finance at about 24% (FY2019–FY2026). By revenue, Bajaj Finance is about 2.6 times the size of Cholamandalam Finance. Bajaj Finance kept 23.6% of revenue as net profit in FY2026; Cholamandalam Finance kept 16.8% of revenue as net profit in FY2026.
Full ten-year tables and charts are on each company's page: Bajaj Finance · Cholamandalam Finance.
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
- Return on equityThe premium only holds if returns stay well above the cost of equity. The figure in 'What each price assumes' shows the return today's price needs.
- Loan growthValue compounds with the book. A slowdown in growth hits a premium lender harder than a cheaply priced one.
- Loan growthRapid book growth drives earnings.
- Return on equityHolding high returns as it diversifies is the key test.
05What could go wrong
- Regulatory tighteningThe RBI has raised capital requirements on unsecured consumer lending and acted against specific Bajaj Finance products in November 2023.
- A consumer-credit downturnRising defaults among stretched borrowers would hit provisions and growth together.
- Vehicle cycleA slowdown in vehicle sales cuts new lending.
- Unsecured lendingConsumer and small-business loans can sour quickly.
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 Bajaj Finance or Cholamandalam Finance 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, Bajaj Finance trades at 32.0 times earnings and 6.10 times book value, and Cholamandalam Finance at 25.0 times earnings and 5.21 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 Bajaj Finance and Cholamandalam Finance?
Bajaj Finance is India's largest non-bank consumer lender and part of the Bajaj Finserv group. Cholamandalam Investment and Finance, part of the Chennai-based Murugappa group, is one of India's largest non-bank lenders.
Are Bajaj Finance and Cholamandalam Finance valued the same way?
Yes — both on excess return, so their workings compare like for like.
What does today's price assume for Bajaj Finance and Cholamandalam Finance?
Worked backwards from the share price, Bajaj Finance needs about 24.9% return on equity and Cholamandalam Finance about 23.6% return on equity, against 20.1% and 20.0% in their own records.