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HDFC AMC and HDFC Bank are valued in different ways.
HDFC AMC is valued on discounted cash flow and HDFC Bank on excess return, because the two businesses do not work the same way. Below, each is set out on its own record and its own value drivers; the two fair values sit in the full valuations.
- Valuation method: HDFC AMC on discounted cash flow; HDFC Bank on excess return.
- Size: HDFC Bank is worth about 10.9 times HDFC AMC on the stock market.
- Record: HDFC Bank has grown revenue faster: HDFC AMC compounded at about 12% a year (FY2019–FY2026) and HDFC Bank at about 22% (FY2019–FY2026).
- What to watch: assets under management at HDFC AMC; return on equity at HDFC Bank.
| HDFC AMC | HDFC Bank | |
|---|---|---|
| Price | ₹2,663 | ₹804 |
| Market cap | ₹1.14L Cr | ₹12.40L Cr |
| P/E | 38.4 | 15.5 |
| P/B | 12.38 | 2.13 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Discounted cash flow | Excess return |
01Two businesses
Managing India's savings
HDFC Asset Management Company runs HDFC Mutual Fund, one of India's largest fund houses, and is a subsidiary of HDFC Bank. It manages equity, debt, hybrid and index funds for millions of investors, many of them saving through monthly SIPs.
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: HDFC AMC compounded at about 12% a year (FY2019–FY2026) and HDFC Bank at about 22% (FY2019–FY2026). By revenue, HDFC Bank is about 120.2 times the size of HDFC AMC. HDFC AMC kept 69.3% of revenue as net profit in FY2026; HDFC Bank kept 15.3% of revenue as net profit in FY2026 — a sign of very different business models.
Full ten-year tables and charts are on each company's page: HDFC AMC · 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
- Assets under managementMarket gains and inflows lift fee income.
- Equity shareEquity funds earn higher fees than debt funds.
- 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
- Market fallsA sustained fall in equities cuts both assets and inflows.
- Fee regulationSEBI caps on expense ratios reduce revenue.
- 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 HDFC AMC 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, HDFC AMC trades at 38.4 times earnings and 12.38 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 HDFC AMC and HDFC Bank?
HDFC Asset Management Company runs HDFC Mutual Fund, one of India's largest fund houses, and is a subsidiary of HDFC Bank. 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 HDFC AMC and HDFC Bank valued the same way?
No. HDFC AMC is valued on discounted cash flow and HDFC Bank on excess return, because forcing one model onto both would misstate at least one of them.
What does today's price assume for HDFC AMC and HDFC Bank?
Worked backwards from the share price, HDFC AMC needs about 34% growth and HDFC Bank about 15.0% return on equity, against 20% and 15.1% in their own records.