JPMorgan has downgraded Bajaj Finance to Neutral from its earlier Overweight stance, assigning a target price of ₹970, which implies a small upside from the current market price of ₹956.50.
The brokerage continues to view Bajaj Finance as a top-quality NBFC, acknowledging its robust fundamentals and impressive long-term performance. However, JPMorgan believes the stock’s current valuation at 29.1x/23.6x FY26/27 price-to-earnings already factors in much of its growth and quality, limiting further upside in the near term.
Key concerns raised by the firm include rising mortgage attrition, unexpected stress in the MSME segment, and weak trends in 2-wheeler and 3-wheeler loan portfolios, all of which could lead to earnings downgrades going forward.
JPMorgan further noted that a stock re-rating is likely to pause for 1–2 quarters, as investors reassess the implications of asset quality pressures in certain portfolios and monitor recovery trends.
Disclaimer: The views and recommendations expressed in this article are those of JPMorgan and do not represent the views of this publication. Investors are advised to consult their financial advisor before making any investment decisions.
