CLSA has reaffirmed its ‘Outperform’ rating on Bajaj Finance, raising optimism about the company’s medium-term prospects despite a relatively subdued FY25. The brokerage has set a target price of ₹11,000, reflecting strong earnings growth potential from FY26 onwards.
“Form is temporary, class is permanent,” CLSA noted, describing FY25 as a year when Bajaj Finance was in “bad form” with growth slowing to 26% and return on equity (ROE) moderating to 19% (9MFY25). However, it believes the company’s asset quality headwinds are now receding, paving the way for a strong comeback.
From FY26, CLSA expects the narrative around the company to shift from concerns on NIM and asset quality to growth acceleration. Even if return on assets (ROA) declines from the current 4% to 3.5% over the next five years and assets under management (AUM) grow at 25% CAGR, PAT is expected to still compound at 22–23% CAGR.
CLSA emphasized that no other large-cap stock in its India coverage offers such robust and consistent profit growth visibility over the medium term.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.
