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Today's prices ask more of Bajaj Finance than of ICICI Bank.
At current prices, buyers of Bajaj Finance are assuming about 24.9% return on equity against 20.1% in its own record; for ICICI Bank it is 17.0% against 17.3%. 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: Bajaj Finance on excess return; ICICI Bank on excess return.
- Size: ICICI Bank is worth about 1.6 times Bajaj Finance on the stock market.
- Record: Bajaj Finance has grown revenue faster: Bajaj Finance compounded at about 21% a year (FY2020–FY2026) and ICICI Bank at about 13% (FY2018–FY2026).
- What to watch: return on equity at Bajaj Finance; sustaining return on equity at ICICI Bank.
| Bajaj Finance | ICICI Bank | |
|---|---|---|
| Price | ₹1,117 | ₹1,584 |
| Market cap | ₹6.95L Cr | ₹11.37L Cr |
| P/E | 32.0 | 19.2 |
| P/B | 6.10 | 3.00 |
| 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.
From clean-up to one of the highest-return big banks
ICICI Bank is India's second-largest private bank, lending to households, small businesses and large companies, with one of the strongest digital-banking franchises in the market. Its group includes a life insurer (ICICI Prudential Life), a general insurer (ICICI Lombard) and a stake in the ICICI Prudential asset-management business.
02The records side by side
Bajaj Finance has grown revenue faster: Bajaj Finance compounded at about 21% a year (FY2020–FY2026) and ICICI Bank at about 13% (FY2018–FY2026). By revenue, ICICI Bank is about 3.8 times the size of Bajaj Finance. Bajaj Finance kept 23.6% of revenue as net profit in FY2026; ICICI Bank kept 18.5% of revenue as net profit in FY2026.
Full ten-year tables and charts are on each company's page: Bajaj Finance · ICICI 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
- 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.
- Sustaining return on equityThe price leans on ICICI holding returns well above its cost of equity. Each point of return it sustains — or loses — moves the value sharply.
- Retail and unsecured growthFaster-growing retail loans earn more but carry more credit risk when the cycle turns.
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.
- The credit cycleUnsecured personal loans and credit cards have grown quickly across the industry; a downturn there would show up in provisions first.
- Margin pressureRate cuts can compress lending margins faster than deposit costs fall.
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 ICICI 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, Bajaj Finance trades at 32.0 times earnings and 6.10 times book value, and ICICI Bank at 19.2 times earnings and 3.00 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 ICICI Bank?
Bajaj Finance is India's largest non-bank consumer lender and part of the Bajaj Finserv group. ICICI Bank is India's second-largest private bank, lending to households, small businesses and large companies, with one of the strongest digital-banking franchises in the market.
Are Bajaj Finance and ICICI Bank valued the same way?
No. Bajaj Finance is valued on excess return and ICICI Bank on excess return, because forcing one model onto both would misstate at least one of them.
What does today's price assume for Bajaj Finance and ICICI Bank?
Worked backwards from the share price, Bajaj Finance needs about 24.9% return on equity and ICICI Bank about 17.0% return on equity, against 20.1% and 17.3% in their own records.