HSBC has maintained its buy rating on Bajaj Finance Ltd (BAF) and raised its target price to ₹1,200 per share, citing stable profitability metrics and an improving growth outlook. The brokerage said Q2FY26 results were in line with expectations, with return on assets (RoA) and return on equity (RoE) remaining stable.
According to HSBC, cost-to-income improvement offset pressures from higher credit costs during the quarter. It expects a pickup in asset under management (AUM) growth, cost efficiencies, and normalisation in credit costs to drive strong earnings momentum. The brokerage projects a 28% CAGR in earnings per share (EPS) over FY26–28.
HSBC also raised its EPS forecasts and target valuation multiple to 5.4x FY27 book value per share, reflecting confidence in Bajaj Finance’s ability to deliver superior profitability even amid tighter liquidity and competitive pressures in retail lending.
Disclaimer: The views and recommendations above are those of HSBC. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
