UBS has maintained a sell rating on Bajaj Finance, assigning a target price of ₹750, which implies a downside of nearly 22% from the current market price of ₹956.50.
The brokerage flagged rising stress in the MSME segment as a key concern, even though the company’s Q1 profit came in ahead of estimates, aided by higher other income. UBS noted that while the headline performance appears strong, the underlying credit metrics—especially in MSME loans—warrant caution.
Bajaj Finance has retained its FY26 credit cost guidance in the range of 1.85–1.95%, indicating no material change in its broader asset quality outlook. UBS also highlighted that there is no near-term uncertainty around leadership, with the management confirming that the successor to the current CEO will be named closer to 2028, ensuring continuity in strategic direction.
Despite robust fundamentals in the consumer lending space, UBS believes current valuations factor in much of the optimism and sees limited upside from current levels.
Disclaimer: The views and recommendations expressed above are those of UBS and do not represent the views of this publication. This article is not a recommendation to buy or sell any stock. Please consult your investment advisor before making any financial decisions.
