Bernstein has downgraded Bajaj Finance to ‘Underperform’, citing limited upside potential despite stable net interest margin (NIM) and no further deterioration in asset quality. The brokerage has set a target price of ₹6,400, implying a 17.5% downside from the current market price of ₹7,759.85.
Bajaj Finance reported a 15% year-on-year EPS growth in Q3, with credit costs coming in slightly higher than management’s guidance. However, the company’s leadership remains confident about asset quality trends, even hinting at a potential return to sub-2% credit costs in FY26.
A key takeaway from the earnings call was the reassurance that the current MD will continue to be involved with the group in some capacity after his term ends in March 2025. While Bernstein acknowledges these positives, it believes the stock’s valuation leaves little room for upside, warranting its downgrade to ‘Underperform’.
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