Goldman Sachs has maintained a Neutral rating on Bajaj Finance, with a target price of ₹969, suggesting a marginal 1% upside from the current market price of ₹956.50.
The brokerage highlighted that core pre-provision operating profit (PPoP) grew 20% year-on-year, but this was largely offset by lower net interest income (NII) due to continued pressure on net interest margins (NIMs). The margin compression reflects rising funding costs and competitive intensity in key segments.
Goldman Sachs pointed to mixed trends in asset quality, with signs of deterioration in the MSME and car loan portfolios. In particular, it noted that 4% of the MSME loan book is currently under restructuring, indicating persistent stress in this segment. Furthermore, the provision coverage ratio (PCR) dropped 160 basis points quarter-on-quarter, despite the ongoing weakness in MSME credit performance.
The report also cited the company’s own commentary that over-leveraging among consumers remains a concern. While the management has reiterated its guidance, Goldman Sachs remains cautious given the evolving asset quality trends and margin pressures.
Disclaimer: The views expressed in this article are solely those of the brokerage firm (Goldman Sachs). They do not constitute investment advice. Investors are advised to consult certified financial advisors before making any investment decisions.
