Bajaj Finance Shares Crash 6.5% After Q2 Results; Growth Guidance Trimmed, Brokerages Stay Bullish
Shares of Bajaj Finance tumbled over 6.5% on Tuesday after the non-banking finance company (NBFC) trimmed its FY26 asset under management (AUM) growth guidance, even as its Q2 FY26 results broadly met market expectations. The stock fell to an intraday low of ₹1,015, while its group company Bajaj Finserv also dropped 6.5% to ₹1,981, ahead of its quarterly results.
Despite the market’s knee-jerk reaction, most brokerages maintained a positive outlook on Bajaj Finance, citing strong profitability, consistent customer growth, and controlled costs as key long-term strengths.
Q2 Performance: Solid Growth Amid Slight Asset Quality Pressure
For the July–September quarter, Bajaj Finance reported a 22% year-on-year jump in consolidated net profit to ₹4,875 crore, while net interest income (NII) rose 22% to ₹10,785 crore.
Its AUM grew 24% YoY to ₹4.62 lakh crore, supported by broad-based expansion across lending segments. The customer base climbed to 110.6 million, with 4.1 million new additions during the quarter.
However, asset quality weakened slightly — gross NPAs rose to 1.24% (from 1.03% in Q1), and net NPAs increased to 0.6%. The management also lowered its FY26 AUM growth guidance to 22–23%, citing softer demand trends in the SME and housing loan portfolios.
Brokerage Reactions: Near-Term Volatility, Long-Term Optimism
Despite the guidance cut, leading brokerage houses largely retained their bullish stance on Bajaj Finance, viewing the current correction as a buying opportunity.
Morgan Stanley maintained an ‘Overweight’ rating with a target price of ₹1,195, noting that while trimmed growth guidance and stable NIMs may disappoint investors, declining credit costs and efficiency gains are positives. The firm sees any near-term weakness as an opportunity to accumulate the stock.
HSBC also issued a ‘Buy’ call, raising its target to ₹1,200. It said Q2 EPS met expectations, supported by stable return ratios and improving cost controls. HSBC expects AUM growth recovery, normalized credit costs, and better cost efficiency to drive a 28% EPS CAGR over FY26–28.
Jefferies echoed optimism with a ‘Buy’ rating and a ₹1,270 target, highlighting strong profit growth of 23% YoY and healthy festive-season lending. It noted that while growth guidance has been reduced by 100 bps to 22–23%, profit CAGR is expected to remain robust at 23% over FY25–28.
CLSA gave an ‘Outperform’ rating with a ₹1,200 target, citing consistent performance across parameters and 24% AUM growth led by secured loans. It noted stable NIMs, better fee income, and only a minor increase in credit costs.
Meanwhile, Bernstein was the only major brokerage to adopt a cautious tone, maintaining an ‘Underperform’ call with a ₹640 target. It flagged rising NPAs across segments and operational strain at scale but acknowledged that the company is tightening costs and rationalising presence to preserve profitability.
Outlook: Cautious Near-Term, Strong Long-Term Fundamentals
Analysts believe short-term volatility may persist due to the revised growth outlook and marginal asset quality concerns. However, Bajaj Finance’s strong franchise, disciplined risk management, and consistent profitability continue to make it a preferred NBFC play for long-term investors.
As the company focuses on digital expansion, credit cost moderation, and AUM diversification, most experts see the stock recovering once investor sentiment stabilises.
