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Today's prices ask more of HDFC Bank than of Bank of Baroda.
At current prices, buyers of Bank of Baroda are assuming about 11.4% return on equity against 13.8% 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 8.7 times Bank of Baroda on the stock market.
- Record: HDFC Bank has grown revenue faster: Bank of Baroda compounded at about 9% a year (FY2020–FY2026) and HDFC Bank at about 22% (FY2019–FY2026).
- What to watch: return on equity at Bank of Baroda; return on equity at HDFC Bank.
| Bank of Baroda | HDFC Bank | |
|---|---|---|
| Price | ₹274 | ₹804 |
| Market cap | ₹1.42L Cr | ₹12.40L Cr |
| P/E | 7.2 | 15.5 |
| P/B | 0.85 | 2.13 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Excess return | Excess return |
01Two businesses
The second-largest public-sector bank
Bank of Baroda, founded in 1908 in Vadodara (then Baroda), is one of India's largest public-sector banks and is majority-owned by the Government of India. It merged with Vijaya Bank and Dena Bank in 2019, and has a larger overseas presence than most Indian banks.
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: Bank of Baroda compounded at about 9% a year (FY2020–FY2026) and HDFC Bank at about 22% (FY2019–FY2026). By revenue, HDFC Bank is about 3.2 times the size of Bank of Baroda. Bank of Baroda kept 12.4% 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: Bank of Baroda · 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
- Return on equityWhether recent returns hold through a full credit cycle.
- Credit costsProvisions on bad loans swing state-bank profits more than anything.
- 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 creditA turn in the corporate cycle would hit provisions first.
- Policy lendingGovernment priorities can shape lending and pricing.
- 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 Bank of Baroda 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, Bank of Baroda trades at 7.2 times earnings and 0.85 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 Bank of Baroda and HDFC Bank?
Bank of Baroda, founded in 1908 in Vadodara (then Baroda), is one of India's largest public-sector banks and is majority-owned by the Government of India. 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 Bank of Baroda 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 Bank of Baroda and HDFC Bank?
Worked backwards from the share price, Bank of Baroda needs about 11.4% return on equity and HDFC Bank about 15.0% return on equity, against 13.8% and 15.1% in their own records.