Shares of Bajaj Finance fell 6 per cent in early trade on Friday amid concerns over MSME stress, deteriorating asset quality and elevated credit costs.
The NBFC posted a consolidated net profit of ₹4,765.29 crore in the quarter ended June 2025, up 21.8 per cent y-o-y, compared to ₹3,911.98 crore in the corresponding quarter previous year.
Market experts believe that the growth in the MSME segment would remain subdued in FY26 due to ongoing macro headwinds.
Global brokerage JP Morgan downgraded the stock from overweight to neutral. Dometic brokerage Motilal Oswal also reiterated neutral rating at a target price of ₹1,000 per share.
Motilal observed Bajaj Finance’s healthy performance for the quarter, driven by strong AUM growth. “While credit costs rose sequentially primarily due to stress in the MSME and Auto Loan segments, asset quality witnessed only a marginal deterioration,” it said.
The brokerage has maintained FY26/FY27 PAT estimates broadly unchanged, and believes that credit costs have now peaked and will remain below the upper end of the guided range.
Jefferies has maintained buy at a target price of ₹1,110.
JM Financial – retaining buy at revised target price of ₹1,000 from ₹985 earlier – continues to like Bajaj Finance given its ability to deliver sector leading growth/RoE on cross-cycle basis. However, near-term concerns around growth/asset quality and rich valuations might limit upside.
HDFC Securities maintained buy at ₹985, adding that the company is poised for 24 per cent AUM CAGR over FY26-FY27, with the scale-up of new products and simultaneously delivering strong profitability.
UBS has maintained sell call at ₹750 per share.
Bajaj Finance shares traded 4.32 per cent lower on the BSE at ₹917.60 as at 10.20 am, hitting a low of ₹897.65. The stock opened lower at ₹908 against the previous close of ₹959.
Bajaj Finserv, set to announce Q1 numbers today, also dragged nearly 5 per cent in today’s trade.
Published on July 25, 2025