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The market asks roughly as much of HDFC Bank as of ICICI Bank.
At current prices, buyers of HDFC Bank are assuming about 15.0% return on equity against 15.1% in its own record; for ICICI Bank it is 17.0% against 17.3%. 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: the two are worth roughly the same on the stock market.
- Record: HDFC Bank has grown revenue faster: HDFC Bank compounded at about 22% a year (FY2019–FY2026) and ICICI Bank at about 13% (FY2018–FY2026).
- What to watch: return on equity at HDFC Bank; sustaining return on equity at ICICI Bank.
| HDFC Bank | ICICI Bank | |
|---|---|---|
| Price | ₹804 | ₹1,584 |
| Market cap | ₹12.40L Cr | ₹11.37L Cr |
| P/E | 15.5 | 19.2 |
| P/B | 2.13 | 3.00 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Excess return | Excess return |
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.
From clean-up to one of the highest-return big banks
ICICI Bank is India's second-largest private bank, lending to households, small businesses and large companies, with one of the strongest digital-banking franchises in the market. Its group includes a life insurer (ICICI Prudential Life), a general insurer (ICICI Lombard) and a stake in the ICICI Prudential asset-management business.
02The records side by side
HDFC Bank has grown revenue faster: HDFC Bank compounded at about 22% a year (FY2019–FY2026) and ICICI Bank at about 13% (FY2018–FY2026). By revenue, HDFC Bank is about 1.6 times the size of ICICI Bank. HDFC Bank kept 15.3% of revenue as net profit in FY2026; ICICI Bank kept 18.5% of revenue as net profit in FY2026.
Full ten-year tables and charts are on each company's page: HDFC Bank · ICICI 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 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.
- Sustaining return on equityThe price leans on ICICI holding returns well above its cost of equity. Each point of return it sustains — or loses — moves the value sharply.
- Retail and unsecured growthFaster-growing retail loans earn more but carry more credit risk when the cycle turns.
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.
- The credit cycleUnsecured personal loans and credit cards have grown quickly across the industry; a downturn there would show up in provisions first.
- Margin pressureRate cuts can compress lending margins faster than deposit costs fall.
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 ICICI 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 Bank trades at 15.5 times earnings and 2.13 times book value, and ICICI Bank at 19.2 times earnings and 3.00 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 ICICI 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. ICICI Bank is India's second-largest private bank, lending to households, small businesses and large companies, with one of the strongest digital-banking franchises in the market.
Are HDFC Bank and ICICI Bank valued the same way?
Yes — both on excess return, so their workings compare like for like.
What does today's price assume for HDFC Bank and ICICI Bank?
Worked backwards from the share price, HDFC Bank needs about 15.0% return on equity and ICICI Bank about 17.0% return on equity, against 15.1% and 17.3% in their own records.