Shares of Bajaj Finance declined 6.5% in early trade on Tuesday after the company revised its FY26 AUM growth guidance lower to 22–23%, even as its Q2 FY26 results met Street estimates.
The stock dropped to ₹1,015, while group firm Bajaj Finserv also slipped 6.5% to ₹1,981, ahead of its quarterly results later in the day.

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Asset Quality Shows Slight Deterioration Analyst Reactions: Positive Outlook with Cautious Undertone Market View

The non-banking finance major reported a 22% year-on-year rise in consolidated net profit to ₹4,875 crore for the July–September quarter.
Net interest income (NII) increased 22% to ₹10,785 crore, and assets under management (AUM) expanded 24% year-on-year to ₹4.62 lakh crore.

The customer base grew to 110.6 million, with 4.1 million new customers added during the quarter.

Asset Quality Shows Slight Deterioration

While operational performance was strong, asset quality weakened slightly.
Gross NPAs increased to 1.24% from 1.03% in the previous quarter, while net NPAs rose to 0.6%.

The company said it revised its FY26 AUM growth guidance from 23–24% to 22–23%, citing softer demand in SME and housing loan segments.

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Analyst Reactions: Positive Outlook with Cautious Undertone

Most brokerages maintained a positive stance on Bajaj Finance despite the trimmed guidance, citing strong fundamentals and profitability.

Morgan Stanley: Overweight | Target ₹1,195

Morgan Stanley retained an Overweight rating, noting that the revised guidance and stable NIMs might disappoint some investors.
However, it highlighted likely declines in credit costs and sustained cost efficiencies, viewing any near-term stock weakness as a buying opportunity.

HSBC: Buy | Target ₹1,200

HSBC gave a Buy rating and raised its target to ₹1,200, stating that Q2 EPS was in line with expectations.
It said stable RoA and RoE were supported by an improved cost-to-income ratio, and forecasted a 28% EPS CAGR for FY26–28 driven by AUM recovery, cost control, and normalised credit costs.
HSBC also raised its EPS forecasts and valuation multiple to 5.4x FY27 BVPS.

Jefferies: Buy | Target ₹1,270

Jefferies maintained a Buy rating with the highest target of ₹1,270.
It noted that profit grew 23% YoY, slightly ahead of expectations, and that festive-season trends were strong.
While growth guidance was lowered by 100 bps, Jefferies expects credit costs to ease and profit CAGR at 23% during FY25–28.

CLSA: Outperform | Target ₹1,200

CLSA reiterated an Outperform call with a ₹1,200 target, citing broad-based strength across key parameters.
It said AUM grew 24% led by secured loans, NIMs were stable, fee income improved, and credit costs rose slightly by 3 bps to 2%.
The firm kept credit cost guidance at 1.85–1.95%, aligning with the management’s updated outlook.

Bernstein: Underperform | Target ₹640

Bernstein took a contrarian view, maintaining an Underperform rating with a ₹640 target.
It said that while headline growth remains strong, higher NPAs across segments and scale pressures are areas of concern.
Bernstein added that Bajaj Finance has tightened costs and rationalised its physical network to maintain profitability.

Market View

Despite the 6.5% stock decline, most brokerages believe Bajaj Finance’s long-term growth story remains intact, supported by its strong profitability metrics, diversified portfolio, and robust customer base.
However, short-term volatility is expected as the market digests the revised growth guidance and asset quality trends.

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