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Today's prices ask more of Bajaj Finance than of Power Finance Corporation.
At current prices, buyers of Bajaj Finance are assuming about 24.9% return on equity against 20.1% in its own record; for Power Finance Corporation it is 9.4% against 25.5%. 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; Power Finance Corporation on estimate withheld.
- Size: Bajaj Finance is worth about 6.3 times Power Finance Corporation on the stock market.
- Record: Bajaj Finance has grown revenue faster: Bajaj Finance compounded at about 21% a year (FY2020–FY2026) and Power Finance Corporation at about 11% (FY2020–FY2026).
- What to watch: return on equity at Bajaj Finance; loan growth at Power Finance Corporation.
| Bajaj Finance | Power Finance Corporation | |
|---|---|---|
| Price | ₹1,117 | ₹334 |
| Market cap | ₹6.95L Cr | ₹1.10L Cr |
| P/E | 32.0 | 4.2 |
| P/B | 6.10 | 0.83 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Excess return | Estimate withheld |
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 bank of India's power sector
Power Finance Corporation (PFC) is a state-owned non-bank lender, majority-owned by the Government of India, that finances generation, transmission and distribution projects. Its borrowers are mostly state-owned utilities and large power companies.
02The records side by side
Bajaj Finance has grown revenue faster: Bajaj Finance compounded at about 21% a year (FY2020–FY2026) and Power Finance Corporation at about 11% (FY2020–FY2026). By revenue, Power Finance Corporation is about 1.4 times the size of Bajaj Finance. Bajaj Finance kept 23.6% of revenue as net profit in FY2026; Power Finance Corporation kept 29.1% of revenue as net profit in FY2026.
Full ten-year tables and charts are on each company's page: Bajaj Finance · Power Finance Corporation.
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 growthInvestment in power and renewables drives demand for loans.
- SpreadsLow funding costs from its state backing support 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.
- ConcentrationHeavy exposure to one sector and to state utilities.
- State discom financesWeak distributors can delay repayment.
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 Power Finance Corporation 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 Power Finance Corporation at 4.2 times earnings and 0.83 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 Power Finance Corporation?
Bajaj Finance is India's largest non-bank consumer lender and part of the Bajaj Finserv group. Power Finance Corporation (PFC) is a state-owned non-bank lender, majority-owned by the Government of India, that finances generation, transmission and distribution projects.
Are Bajaj Finance and Power Finance Corporation valued the same way?
No. Bajaj Finance is valued on excess return and Power Finance Corporation on estimate withheld, because forcing one model onto both would misstate at least one of them.
What does today's price assume for Bajaj Finance and Power Finance Corporation?
Worked backwards from the share price, Bajaj Finance needs about 24.9% return on equity and Power Finance Corporation about 9.4% return on equity, against 20.1% and 25.5% in their own records.