Macquarie has reiterated its Underperform rating on Bajaj Finance, setting a target price of ₹800 per share, implying a downside of nearly 16% from the current market price of ₹956.50.
In its Q1 review, the brokerage noted that while profit after tax (PAT) was in line with estimates, it was supported by lower provisioning, which offset the impact of muted other income. The key concern flagged by Macquarie is the stress in the SME (MSME) segment, which continues to drive elevated credit costs.
Macquarie also believes that the stock is not pricing in the potential risks adequately. Specifically, it feels the market is overlooking possible cuts to the company’s growth guidance and the rising credit costs. The firm values Bajaj Finance at 4.4x FY27 estimated price-to-book, a level which it argues already factors in 24–25% AUM (Assets Under Management) growth, leaving little headroom for upside.
Given the challenging MSME outlook and tight valuations, Macquarie sees limited near-term triggers and advises caution on the stock.
Disclaimer: The views expressed in this article are solely those of the brokerage firm (Macquarie). They do not constitute investment advice. Investors are advised to consult certified financial advisors before making any investment decisions.
