On this page ▾
The market asks roughly as much of Bajaj Finance as of Kotak Mahindra Bank.
At current prices, buyers of Bajaj Finance are assuming about 24.9% return on equity against 20.1% in its own record; for Kotak Mahindra Bank it is 16.3% against 13.1%. 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: Bajaj Finance on excess return; Kotak Mahindra Bank on excess return.
- Size: Bajaj Finance is worth about 1.4 times Kotak Mahindra Bank on the stock market.
- Record: Bajaj Finance has grown revenue faster: Bajaj Finance compounded at about 21% a year (FY2020–FY2026) and Kotak Mahindra Bank at about 13% (FY2019–FY2026).
- What to watch: return on equity at Bajaj Finance; return on equity versus capital at Kotak Mahindra Bank.
| Bajaj Finance | Kotak Mahindra Bank | |
|---|---|---|
| Price | ₹1,117 | ₹489 |
| Market cap | ₹6.95L Cr | ₹4.86L Cr |
| P/E | 32.0 | 22.6 |
| P/B | 6.10 | 2.68 |
| 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 finance company to full financial group
Kotak Mahindra Bank grew out of a finance company founded by Uday Kotak in 1985 and became a bank in 2003. Alongside lending and deposits, the group runs one of India's larger broking and investment-banking businesses, a life insurer, an asset manager and a car-finance arm.
02The records side by side
Bajaj Finance has grown revenue faster: Bajaj Finance compounded at about 21% a year (FY2020–FY2026) and Kotak Mahindra Bank at about 13% (FY2019–FY2026). By revenue, Kotak Mahindra Bank is about 1.3 times the size of Bajaj Finance. Bajaj Finance kept 23.6% of revenue as net profit in FY2026; Kotak Mahindra Bank kept 17.8% of revenue as net profit in FY2026.
Full ten-year tables and charts are on each company's page: Bajaj Finance · Kotak Mahindra 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.
- Return on equity versus capitalKotak holds more capital per rupee of loans than most peers, which caps its return on equity unless growth picks up.
- The deposit franchiseLow-cost current and savings deposits are the cheapest funding a bank can have; keeping them is central to its margins.
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.
- Regulatory actionThe 2024 RBI restriction showed how quickly technology lapses can stall growth.
- Slower growth than peersCaution can mean losing share in a strong credit cycle.
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 Kotak Mahindra 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 Kotak Mahindra Bank at 22.6 times earnings and 2.68 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 Kotak Mahindra Bank?
Bajaj Finance is India's largest non-bank consumer lender and part of the Bajaj Finserv group. Kotak Mahindra Bank grew out of a finance company founded by Uday Kotak in 1985 and became a bank in 2003.
Are Bajaj Finance and Kotak Mahindra Bank valued the same way?
No. Bajaj Finance is valued on excess return and Kotak Mahindra 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 Kotak Mahindra Bank?
Worked backwards from the share price, Bajaj Finance needs about 24.9% return on equity and Kotak Mahindra Bank about 16.3% return on equity, against 20.1% and 13.1% in their own records.