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HDFC Bank and HDFC Life are valued in different ways.
HDFC Bank is valued on excess return and HDFC Life on embedded value, 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 Bank on excess return; HDFC Life on embedded value.
- Size: HDFC Bank is worth about 9.6 times HDFC Life on the stock market.
- Record: HDFC Life's filed history in the data used here is too short to compare year by year, so only HDFC Bank's record is summarised: revenue went from FY2019 to FY2026 at about 22% a year.
- What to watch: return on equity at HDFC Bank; value of new business at HDFC Life.
| HDFC Bank | HDFC Life | |
|---|---|---|
| Price | ₹804 | ₹592 |
| Market cap | ₹12.40L Cr | ₹1.29L Cr |
| P/E | 15.5 | 62.9 |
| P/B | 2.13 | 7.25 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Excess return | Embedded value |
01Two businesses
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.
A bank-backed private life insurer
HDFC Life Insurance is one of India's largest private life insurers and a subsidiary of HDFC Bank since the HDFC merger in 2023. It sells savings, protection, annuity and pension policies, much of it through HDFC Bank's branches, along with agents and other partners. It merged Exide Life into itself in 2022.
02The records side by side
HDFC Life's filed history in the data used here is too short to compare year by year, so only HDFC Bank's record is summarised: revenue went from FY2019 to FY2026 at about 22% a year.
Full ten-year tables and charts are on each company's page: HDFC Bank · HDFC Life.
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 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.
- Value of new businessHow much value each year's new policies add is the main driver of growth.
- New-business marginsProtection and non-participating products earn more than plain savings policies.
05What could go wrong
- 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.
- RegulationRules on commissions and surrender values can squeeze margins.
- Tax changesChanges to tax breaks on insurance savings can reduce demand.
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 Bank or HDFC Life 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 Bank trades at 15.5 times earnings and 2.13 times book value, and HDFC Life at 62.9 times earnings and 7.25 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 Bank and HDFC Life?
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. HDFC Life Insurance is one of India's largest private life insurers and a subsidiary of HDFC Bank since the HDFC merger in 2023.
Are HDFC Bank and HDFC Life valued the same way?
No. HDFC Bank is valued on excess return and HDFC Life on embedded value, because forcing one model onto both would misstate at least one of them.
What does today's price assume for HDFC Bank and HDFC Life?
Worked backwards from the share price, HDFC Bank needs about 15.0% return on equity and HDFC Life about 16.5× new-business multiple, against 15.1% and 25.0× in their own records.