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Neither company is an unconditional winner for long-term investors. Bajaj Finance offers a faster-growing, higher-return NBFC profile, with credit-cycle, funding and capital risks to weigh. HDFC Bank brings a large deposit franchise and lower gross NPA in the cited FY2026 figures, while it continues to manage merger-related pressure on margins and funding costs. The better fit depends on your risk tolerance, investment horizon and—crucially—the price you pay.
Start with the difference in business models
Bajaj Finance is a non-bank financial company (NBFC) that lends across customer and business segments and also offers products such as fixed deposits, payments, insurance and investments. HDFC Bank is a bank with a deposit-taking franchise and banking operations. Their funding sources, regulatory frameworks and economics differ, so a ratio or balance-sheet figure from one should not be treated as directly interchangeable with a similar-sounding measure from the other.
That distinction shapes the investment choice. Bajaj Finance’s growth depends on deploying capital into lending and other financial products while managing credit losses and funding costs. HDFC Bank’s deposit base is a central part of its funding model; investors also need to watch the cost of those funds and how effectively the bank uses them.
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The figures below come from different reporting bases and periods. Bajaj Finance’s FY2026 figures include both company-reported highlights and ICRA’s audited, consolidated indicators. HDFC Bank’s full-year results and Q4 indicators are standalone figures. They are useful for understanding each business, but not for a simple league-table ranking.
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| Measure | Bajaj Finance | HDFC Bank | How to read it |
|---|---|---|---|
| Scale and earnings | ICRA reported audited FY2026 consolidated total managed assets of ₹5,81,280 crore and PAT of ₹19,332 crore. Bajaj Finance’s own FY2026 highlights reported AUM of ₹5,09,975 crore, net total income of ₹53,324 crore and highlighted PAT of ₹20,689 crore. | FY2026 audited standalone net revenues were ₹1,912.2 billion and PAT was ₹746.7 billion. | The Bajaj AUM and total managed assets are different measures, and its company-highlighted PAT has specified exclusions. The companies’ earnings and scale figures also use different reporting bases; do not compare them as like-for-like measures. |
| Growth and returns | Bajaj Finance reported FY2026 AUM growth of 22% and ROE of 19.2% in its annual-report highlights. ICRA reported a 3.6% return on average managed assets for FY2026. | In Q4 FY2026, average deposits grew 12.8% year over year and average advances under management grew 10.0%. The quarter’s ROA was 1.96% and NIM was 3.38%. | These are different return measures, periods and business models. Bajaj’s ROE is not equivalent to HDFC Bank’s ROA, and the growth figures do not cover identical measures. |
| Asset quality | Bajaj Finance reported FY2026 GNPA of 1.01% and NNPA of 0.41%. ICRA reported gross Stage 3 assets of 1.0%. | HDFC Bank reported Q4 FY2026 gross NPA of 1.15%, or 0.91% excluding agricultural advances in its presentation. | Definitions, portfolios and dates differ. A lower reported ratio on its own does not establish lower future credit losses. |
| Capital and funding | ICRA reported standalone CRAR of 21.6%. Bajaj Finance’s NBFC funding model includes market borrowings and deposits. | HDFC Bank reported Q4 FY2026 capital adequacy of 19.7%, including CET1 of 17.3%. Its FY2026 Form 20-F reported deposits of ₹31,001.7 billion at March 31, 2026, with current and savings accounts at 34.1% of deposits. | Capital ratios, regulatory treatment and entity basis differ; they should not be ranked as if they measured the same balance-sheet capacity. |
Sources: Bajaj Finance FY2026 annual-report material; ICRA’s June 18, 2026 rating rationale; HDFC Bank’s FY2026 audited results and Q4 presentation; and HDFC Bank’s FY2026 Form 20-F.
Why Bajaj Finance may appeal to growth-oriented investors
Bajaj Finance’s expansion has been substantial. ICRA’s FY2024-to-FY2026 series shows total managed assets rising from ₹3,85,101 crore to ₹5,81,280 crore. That growth is not enough, by itself, to establish that returns on each additional rupee of assets or capital are improving.
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Over the same period, ICRA’s return on average managed assets declined from 4.3% to 3.6%, while standalone CRAR fell from 22.5% to 21.6%. Those changes do not prove deterioration, but they make risk-adjusted growth, capital consumption and funding costs important parts of the investment case. An investor considering Bajaj Finance should ask whether it can keep expanding while sustaining returns and controlling credit costs.
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1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitchesThe company’s FY2026 annual-report material presents a Long-Range Strategy for 2026–30 centered on customer centricity and technology leadership, and states an ambition to be India’s lowest-risk company. These are management priorities and an aspiration, not demonstrated future outcomes or a promise of returns. The relevant test for shareholders is how execution shows up in growth, credit performance, profitability and capital needs.
Why HDFC Bank may appeal to investors seeking a bank franchise
HDFC Bank combines a large deposit base with continued growth in deposits and advances. Its FY2026 Form 20-F reported deposits of ₹31,001.7 billion as of March 31, 2026, with current and savings deposits accounting for 34.1%. Its Q4 FY2026 presentation reported average deposits growth of 12.8% year over year and average advances-under-management growth of 10.0%.
The merger with HDFC Limited is an important part of the bank’s current investment case. The merger became effective July 1, 2023. In its FY2026 Form 20-F, HDFC Bank said margins decreased because the acquired business had a relatively lower-yielding asset mix and relatively higher funding costs than the bank. That is the company’s explanation of margin pressure, not a forecast that margins will recover on a particular timetable.
For an investor assessing HDFC Bank, the practical questions are whether deposit growth keeps pace with lending, what it costs to attract and retain funding, how NIM develops and whether the economics of the merged business improve. Its Q4 FY2026 NIM was 3.38%; that single quarter’s figure does not resolve the longer-term integration question.
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HDFC Bank’s June 2026 quarter update is newer than its FY2026 year-end figures. It 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.
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These figures give a more recent view of HDFC Bank’s operating momentum, but they are not a matched comparison with Bajaj Finance: the sourced figures do not establish a comparable Bajaj Finance FY2027 interim-quarter update. Do not infer that HDFC grew faster or slower than Bajaj over the same period from these figures.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Decide by weighing the risks, not just the headline ratios
- Credit-cycle exposure: GNPA, NNPA and Stage 3 ratios describe asset quality at a point in time; they cannot guarantee how either portfolio will perform through a future downturn.
- Bajaj Finance’s risk-adjusted expansion: Follow credit costs, underwriting, funding costs, returns on assets and capital use alongside managed-asset growth.
- HDFC Bank’s funding and integration: Follow deposit growth and funding costs alongside NIM and progress in realizing merger benefits.
- Capital and profitability: Read each company’s capital and return measures using the reported definition, period and entity basis. A higher percentage across different definitions is not automatically a better result.
- Valuation: A strong operating record does not establish that a stock is attractive at a particular price. A current comparison would require verified share prices and comparable valuation measures, which are not established by the figures cited here.
- Personal fit: Consider your investment horizon, ability to tolerate volatility, existing exposure to financial companies and the role each investment would play in your portfolio.
Which is the better fit?
Bajaj Finance may suit a long-term investor seeking exposure to a faster-growing specialist lender who is comfortable assessing NBFC funding and credit-cycle sensitivity. HDFC Bank may suit an investor seeking a deposit-taking banking franchise who is willing to follow funding costs, margin performance and post-merger integration.
Those are business-fit distinctions, not share-price recommendations. Without current, comparable valuation evidence, the operating figures alone cannot establish which stock offers the better expected return. Any preference should account for the price paid as well as the risks and portfolio context.
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