Bajaj Finance shares fell sharply by nearly 6% to ₹901.55 in early trade on Thursday, despite posting a ~20% YoY jump in standalone net profit to ₹4,765 crore for Q1FY26. The stock opened at ₹906.40 and touched a low of ₹900.00, with volumes already crossing 29 lakh shares on NSE by 9:45 AM.
While the NBFC delivered robust earnings growth, driven by 25% YoY AUM expansion and stable operating metrics, analysts and investors turned cautious over signs of stress in the MSME, two-wheeler and three-wheeler loan segments. The decline in provision coverage ratio and persistent elevated credit costs added to concerns.
Here’s how major brokerages are interpreting the results:
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UBS maintained a sell rating with a target of ₹750, citing MSME stress and noted that the PAT beat was led by other income. It also highlighted no near-term leadership uncertainty.
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Macquarie retained an underperform call with a target of ₹800, warning that growth guidance cuts and elevated credit costs are not fully priced into the stock.
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Goldman Sachs remained neutral with a TP of ₹969, pointing out NIM pressure and asset quality concerns in MSME and car loans, with 4% of MSME book restructured.
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Bernstein kept an underperform view with a target of ₹640, stressing that elevated credit costs and narrowing loan spreads could pressure profitability.
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Citi maintained neutral with a TP of ₹983, acknowledging stable credit costs but flagged additional MSME restructuring in Q2.
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CLSA was more optimistic, maintaining an outperform rating with a target of ₹1,150, citing 25% AUM growth and a PAT beat driven by lower credit costs.
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JPMorgan downgraded the stock to neutral from overweight, with a target of ₹970, flagging rising mortgage attrition and possible earnings downgrades.
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Motilal Oswal has a neutral stance with a target of ₹980, expressing concern on elevated credit costs despite in-line core performance.
While Bajaj Finance remains a high-quality NBFC name, today’s market reaction reflects investor apprehension over asset quality and the ability to sustain historical growth rates amid sector-wide stress.
Disclaimer: The views and recommendations expressed are those of individual brokerages. They do not represent the views of this publication. Investors are advised to consult their financial advisors before making investment decisions.
