Compare Indian non-bank financial company (NBFC) stocks by matching lenders with similar business models, then assess asset growth, credit quality, profitability, funding and valuation together. AUM growth or a low NPA ratio is not a verdict on its own; the useful question is whether growth is producing sustainable returns without taking on disproportionate risk.
Start with comparable NBFCs
Choose peers that lend to similar customers through similar products, loan tenures, collateral and funding models. A consumer lender, vehicle financier, housing lender and microfinance lender can have very different growth prospects and credit-risk patterns. Comparing their headline ratios without accounting for those differences can mislead.
Regulatory classification is not a substitute for business-model comparison. The Reserve Bank of India’s 2024–25 Upper Layer list includes Bajaj Finance, Shriram Finance and Cholamandalam Investment and Finance Company, but their inclusion does not make them investment peers. The RBI says, “The top ten eligible NBFCs in terms of their asset size shall always reside in Upper Layer, irrespective of any other factor.” RBI Scale Based Regulation directions
Assess AUM growth in context
Assets under management (AUM) growth shows the expansion of the assets a lender manages. It does not, by itself, establish that the growth is profitable, durable or prudent. Compare the same reporting periods—year over year or across a consistent multi-year span—and check whether expansion comes from the same products and customer segments.
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For example, Bajaj Finance reported FY2025 AUM of ₹416,661 crore, up 26% from ₹330,615 crore in FY2024. These are company-reported historical figures for those financial years, not a target growth rate or a current peer comparison. Bajaj Finance FY2025 annual report and investor disclosures
- Check what is driving growth: product mix, customer mix and changes in the managed portfolio.
- Look alongside growth at credit losses, funding costs, profitability and capital needs.
- Use comparable periods and accounting bases; do not compare one company’s standalone numbers with another’s consolidated figures without flagging the difference.
Read GNPA and NNPA with their definitions
Gross non-performing assets (GNPA) and net non-performing assets (NNPA) help describe asset quality. GNPA reflects loans classified as non-performing before deducting provisions; NNPA reflects the remaining exposure after applicable provisions. The gap can therefore offer context on provisioning, but neither ratio alone reveals the full risk in a loan book. Check which assets are included, how much provision is held, and how the lender’s product and customer mix affects the figures.
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Recognition rules matter too. The RBI’s Scale Based Regulation framework changed the overdue norm for NBFCs and set a glide path for Base Layer NBFCs to reach the more-than-90-day norm by March 31, 2026. The RBI handbook cautions that references to 90 days should be read in light of applicable norms and the SBR provisions. RBI Scale Based Regulation framework · RBI handbook and publications
As an illustration, Bajaj Finance reported FY2025 GNPA of 0.96% and NNPA of 0.44%. Those are company-reported figures for that period, not universal benchmarks for what constitutes good asset quality. Bajaj Finance FY2025 highlights
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Set growth and NPA ratios beside profitability, credit costs, loan-loss provisions and funding conditions. Return on assets (ROA) and return on equity (ROE) can help show how effectively a lender turns its asset base and shareholders’ capital into earnings, but they should be interpreted alongside the risks and resources required to generate those returns.
Bajaj Finance’s FY2025 annual report gives ROA of 4.57% and ROE of 19.19%. It also reports that loan-loss provisions rose 72% year over year, which the company attributed to macro deterioration, increased leverage on unsecured loans and wider banking-industry stress. The figures illustrate why a strong growth rate or low NPA ratio should not be read in isolation. Bajaj Finance FY2025 annual report
- Credit cost and provisions: Consider whether losses and provisions are changing as the book expands.
- Funding: Examine funding mix and cost, since borrowing conditions can affect margins and the ability to grow.
- Capital: Check capital adequacy and whether growth may require additional capital.
- Returns: Compare ROA and ROE over the same period, with attention to whether performance appears sustainable.
Use valuation as a relative comparison
Price-to-book (P/B) can be a starting point for comparing lenders, but it is not a standalone measure of whether a share is cheap or expensive. Relate valuation to sustainable ROE, expected growth, asset quality, capital requirements and funding risk. Compare prices on the same date and use the same accounting basis for each company.
The available figures here do not establish current peer multiples or a current valuation ranking. To make that comparison, use dated market prices and each company’s relevant filings, then calculate the same valuation measure consistently. Do not confuse market P/B with the RBI’s prudential definition of “fair value,” which is based on earning value and breakup value. RBI Scale Based Regulation directions
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Build a consistent comparison sheet
Collect each peer’s latest filings and record the reporting period and accounting basis beside every figure. A useful comparison sheet can include:
- Lending segment, customer mix, loan duration and collateral
- AUM and growth over the same period
- GNPA, NNPA, definitions used and provisioning
- Credit costs and loan-loss provisions
- ROA and ROE
- Funding mix, cost of funds and capital adequacy
- Valuation, using a common date and accounting basis
Keep periods, definitions and bases aligned before drawing comparisons. The historical Bajaj Finance figures above provide an example of how to read a company’s disclosures, not a current ranking of NBFC stocks.
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