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Today's prices ask more of IndusInd Bank than of HDFC Bank.
At current prices, buyers of HDFC Bank are assuming about 15.0% return on equity against 15.1% in its own record; for IndusInd Bank it is 12.5% against 3.4%. 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 17.5 times IndusInd Bank on the stock market.
- Record: HDFC Bank has grown revenue faster: HDFC Bank compounded at about 22% a year (FY2019–FY2026) and IndusInd Bank at about 7% (FY2020–FY2026).
- What to watch: return on equity at HDFC Bank; normalised profitability at IndusInd Bank.
| HDFC Bank | IndusInd Bank | |
|---|---|---|
| Price | ₹804 | ₹914 |
| Market cap | ₹12.40L Cr | ₹0.71L Cr |
| P/E | 15.5 | 23.7 |
| P/B | 2.13 | 1.08 |
| 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.
A high-return private bank, knocked off course
IndusInd Bank, part of the Hinduja group, is a mid-sized private bank known for vehicle finance, microfinance through Bharat Financial Inclusion, credit cards and corporate lending. For years it earned high margins from these higher-yielding loans.
02The records side by side
HDFC Bank has grown revenue faster: HDFC Bank compounded at about 22% a year (FY2019–FY2026) and IndusInd Bank at about 7% (FY2020–FY2026). By revenue, HDFC Bank is about 9.3 times the size of IndusInd Bank. HDFC Bank kept 15.3% of revenue as net profit in FY2026; IndusInd Bank kept 1.7% 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 Bank · IndusInd 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.
- Normalised profitabilityHow much the bank earns once one-time losses are behind it is the core question.
- Deposit stabilityKeeping depositors confident after the shock protects funding.
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.
- Further surprisesAdditional write-downs would delay recovery.
- Microfinance stressRural borrower stress can raise defaults quickly.
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 IndusInd 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 IndusInd Bank at 23.7 times earnings and 1.08 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 IndusInd 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. IndusInd Bank, part of the Hinduja group, is a mid-sized private bank known for vehicle finance, microfinance through Bharat Financial Inclusion, credit cards and corporate lending.
Are HDFC Bank and IndusInd 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 IndusInd Bank?
Worked backwards from the share price, HDFC Bank needs about 15.0% return on equity and IndusInd Bank about 12.5% return on equity, against 15.1% and 3.4% in their own records.