Highest-ROE scaled lender
| Peer | Status | P/E | ROE | Mkt cap | Why we do not hold it (approved text) | Links |
|---|---|---|---|---|---|---|
| Bajaj Finance | Held | 30.94 | 16.68% | 6.28 L Cr | Highest-ROE scaled lender | |
| Cholamandalam Investment & Finance | Not held | n/a | n/a | n/a | Chola (27x PE, 5.2x P/B, ROE 19.4%, Q1FY27 PAT +46%) is similarly priced but is a vehicle-finance-heavy lender with a smaller cross-sell franchise; Bajaj offers larger scale (AUM 5.5 lakh cr), higher ROA (4.3-4.7% guidance) and a diversified 20+ product engine at a comparable 32x/5.8x. | Screener · Tijori |
| Shriram Finance | Also held | 20.92 | 15.21% | 2.37 L Cr | Shriram is cheaper (21.6x PE, 3.0x P/B, ROE 16.4%) but is a CV/used-vehicle lender with structurally higher credit costs and lower ROA; Bajaj's premium is paid for 9.6% NIM, sub-1% GNPA and 30%+ ten-year profit CAGR. | Screener · Tijori |
| HDB Financial Services | Not held | n/a | n/a | n/a | HDB (26x PE, ROE 14.7%, stock -11% over 1 year post-IPO) has lower ROE, a thinner NIM and no comparable consumer-durable/EMI ecosystem; Bajaj's 20%+ ROE and 24% AUM growth justify its higher multiple. | Screener · Tijori |
Peer numbers are shown only where the peer is in the security master (fundamentals pulled); "n/a" otherwise — a peer is not added to the data pull without a research request. Reasons are quoted from the one-pager (8 Sep 2026).
Cholamandalam is an excellent vehicle financier but at 4x+ book already prices its growth, and its ROE (18–20%) is on a more bank-like, lower-yield book; M&M Financial has a decade of volatile credit costs; Sundaram Finance is conservative to the point of not growing. HDB Financial lists at a premium to its own economics on the HDFC halo. We hold no gold-loan or microfinance NBFC in the PMS (Manappuram appears only in the AIFs): the gold-loan regulatory reset and the FY25–26 microfinance stress cycle are exposures we would rather take through IDFC First and Shriram's diversified book.
All sectors we avoid or underweight →Bajaj Finance (3.5%, Core) is the highest-ROE scaled lender in India (18–20% on a levered, diversified book of 100+ million customers) and the benchmark for what technology-led underwriting can do; we pay 37x FY27E on the sheet for a franchise guiding 23–24% profit growth. Shriram Finance (3.5%, Core) is the mirror image: the largest used-commercial-vehicle financier, 16% ROE, 3x book, 21x earnings, a rural and self-employed borrower base that no bank can reach, and now a Japanese mega-bank as a 20% shareholder.