There is no unconditional winner. Bajaj Finance offers a faster-growth, specialist non-bank lender profile, but its expansion needs to be judged alongside credit risk, funding costs and capital use. HDFC Bank offers a large deposit-taking franchise, though its margins and funding economics remain part of the post-merger investment case. The better fit depends on the risks you are willing to accept—and on the price you would pay for either share.
What kind of businesses are you comparing?
Bajaj Finance is a non-banking financial company (NBFC) with lending across customer and business segments, alongside products such as fixed deposits, payments, insurance and investments. It uses market borrowings and deposits as part of its funding mix. HDFC Bank is a bank with a substantial deposit franchise and banking operations. The different funding models, regulatory frameworks and reporting measures mean their headline ratios should not be treated as directly interchangeable.
That distinction matters for a long-term investor: a lender can grow quickly without producing the same returns or using capital in the same way as a bank. Compare each company against its own trajectory as well as against the other business.
How do their reported FY2026 figures compare?
The figures below come from different reporting bases and periods. Bajaj Finance’s ICRA figures are audited consolidated indicators for FY2026, while HDFC Bank’s financial results are standalone; its operating indicators are for Q4 FY2026. They are useful context, not a like-for-like ranking.
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| Measure | Bajaj Finance | HDFC Bank | How to read it |
|---|---|---|---|
| Scale and earnings | ICRA reported total managed assets of ₹5,81,280 crore and PAT of ₹19,332 crore for FY2026, on an audited consolidated basis. | Audited FY2026 standalone net revenues were ₹1,912.2 billion and PAT was ₹746.7 billion. | Managed assets are not comparable to revenues, and the PAT figures have different consolidation bases. Do not use them alone to rank the companies. |
| Growth | Bajaj Finance reported FY2026 AUM of ₹509,975 crore, up 22%; the company’s highlighted results use specified exclusions and adjustments. | In Q4 FY2026, average deposits grew 12.8% year over year and average advances under management grew 10.0%, according to the bank’s presentation. | The measures and periods differ. Growth rates say nothing on their own about valuation or future returns. |
| Profitability | ICRA calculated return on average managed assets of 3.6% for FY2026. Bajaj Finance reported 19.2% ROE in its annual-report highlights, with specified exclusions and adjustments to highlighted PAT. | HDFC Bank reported Q4 FY2026 NIM of 3.38% and ROA of 1.96% in its presentation. | ROE, ROA and NIM measure different things. Retain the source’s definition and period when comparing them. |
| Asset quality | Bajaj Finance’s FY2026 annual-report material reported GNPA of 1.01% and NNPA of 0.41%; ICRA reported gross Stage 3 assets of 1.0%. | HDFC Bank’s Q4 FY2026 presentation reported gross NPA of 1.15%, or 0.91% excluding agricultural advances. | Portfolio composition and definitions differ. These are point-in-time ratios, not guarantees of future credit losses. |
| Capital and funding | ICRA reported standalone CRAR of 21.6% for FY2026. The NBFC funding model includes market borrowings and deposits. | HDFC Bank reported capital adequacy of 19.7% and CET1 of 17.3% in Q4 FY2026. Its FY2026 Form 20-F reported deposits of ₹31,001.7 billion at March 31, 2026, with current and savings deposits at 34.1% of total deposits. | Capital ratios have different regulatory and entity bases. A deposit franchise is a meaningful distinction, but deposit growth and cost still matter. |
What makes Bajaj Finance compelling—and what should investors watch?
Growth, returns and capital need to be read together
ICRA’s June 18, 2026 rating rationale reports that Bajaj Finance’s total managed assets increased from ₹3,85,101 crore in FY2024 to ₹5,81,280 crore in FY2026. Over the same period, ICRA-calculated return on average managed assets declined from 4.3% to 3.6%, while standalone CRAR moved from 22.5% to 21.6%. Those figures do not by themselves establish deterioration. They do show why asset growth should be considered alongside the return earned on those assets and the capital required to support them.
The company’s annual-report highlights report FY2026 AUM growth of 22%, ₹53,324 crore in net total income and ₹20,689 crore in highlighted PAT. The company notes that its highlighted PAT and ROE exclude specified additional expected credit loss (ECL) provisions, management and macro overlays, and a one-time labour-code charge. Investors should distinguish those highlighted figures from reported earnings and understand the adjustments before using them in a trend or valuation analysis.
Rank #2
Credit quality and management priorities are not guarantees
For a long-term holder, the central test is whether Bajaj Finance can keep expanding while maintaining underwriting discipline, acceptable credit costs and attractive funding. Its FY2026–30 Long-Range Strategy emphasizes customer centricity and technology leadership, and states an ambition to be India’s “lowest-risk company.” These are management priorities and aspirations, not established future outcomes.
- Track whether growth continues to translate into sustainable returns, not just a larger loan book.
- Watch credit performance through different economic conditions; current GNPA, NNPA and Stage 3 ratios do not predict losses in a future cycle.
- Assess capital consumption and funding costs as the business expands.
What makes HDFC Bank compelling—and what should investors watch?
Deposits are central to the bank’s case
HDFC Bank’s FY2026 Form 20-F reported deposits of ₹31,001.7 billion as of March 31, 2026; current and savings deposits made up 34.1% of that total. Its Q4 FY2026 presentation reported average deposit growth of 12.8% year over year, alongside average advances-under-management growth of 10.0%. For investors, the question is not only whether advances grow, but whether the bank can gather deposits and fund lending at a cost that supports its margins.
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The merger with HDFC Limited became effective on July 1, 2023. In its FY2026 Form 20-F, HDFC Bank explained: “Our net interest margins decreased as a result of the Transaction because HDFC Limited had a relatively lower-yielding asset product mix and a relatively higher cost of funds compared to the Bank.” This is the bank’s explanation of merger-related pressure, not a forecast that margins will recover on a particular timetable. Monitor deposit growth, cost of funds, NIM and evidence that the merged business is realizing its intended economics.
A newer update is not a matched comparison
HDFC Bank’s June 2026 quarter update reported period-end gross advances of ₹30,610 billion, up about 15.4% year over year, and average deposits of ₹30,114 billion, up about 13.3%. The filing says the June 30 results were subject to limited review. These newer figures add context to HDFC Bank’s trajectory, but they should not be compared as a current-quarter contest with Bajaj Finance: the available figures here do not establish a comparable Bajaj Finance FY2027 interim update.
Which company may suit which long-term investor?
Bajaj Finance may suit an investor who
- Wants exposure to a specialist lender with a record of substantial managed-asset growth.
- Can tolerate NBFC funding and credit-cycle sensitivity.
- Is willing to monitor whether growth remains risk-adjusted and whether returns and capital efficiency hold up.
HDFC Bank may suit an investor who
- Prefers exposure to a bank with a large deposit-taking franchise.
- Values reported capital strength and wants to assess a bank’s earnings through its deposit and margin dynamics.
- Can wait for merger integration and funding economics to develop without assuming a particular recovery timetable.
These are business-fit descriptions, not predictions about share-price performance. An investor’s risk tolerance, time horizon, portfolio concentration and need for liquidity can change which profile is more appropriate.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What should you check before choosing between the shares?
Company fundamentals cannot establish which stock is the better buy at a particular price. The figures considered here do not establish current share prices or comparable valuation estimates, so they cannot support a valuation-based winner. Before investing, compare both companies using consistent dates and definitions, and assess:
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- Valuation: What expectations for future growth, profitability and risk are already reflected in each share price? Compare appropriate valuation measures on the same date rather than relying on operating growth alone.
- Risk-adjusted growth: Is the company converting growth into durable returns without an unacceptable rise in credit costs or capital needs?
- Funding: How resilient is the funding base, and what happens to profitability if funding costs rise or deposit growth slows?
- Asset quality: Are credit indicators holding up across portfolios and through a full cycle? Keep each company’s definitions and reporting basis intact.
- Capital efficiency: Is the company earning an adequate return on the capital it must retain to support expansion?
- Execution: For Bajaj Finance, monitor risk-adjusted expansion and capital use. For HDFC Bank, monitor deposit economics, margins and merger integration.
Use the same reporting period wherever possible. A newer figure is not automatically a fairer comparison if only one company has reported it or if the measure is different.
Conclusion
Bajaj Finance is the more growth-oriented NBFC profile in this comparison, with expansion that should be evaluated against returns, credit performance and capital use. HDFC Bank offers the deposit-taking bank profile, with its own key question being how funding costs and merger integration affect margins. Neither profile is a universal fit, and neither company’s operating results alone establish a better investment. A decision requires a view on business risks and a valuation based on the price available to you.
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