4 hours ago
Shares of Bajaj Finance Ltd., which have gained over 30% so far in 2025, are expected to react to their March quarter results, announced after market close on Tuesday. The stock has risen in only one of the last five trading sessions.
India's leading non-bank lender's net profit and net interest income (NII) came in slightly below CNBC-TV18’s estimates but recorded double-digit growth compared to the same quarter last year. Alongside the results, the company also approved a bonus issue of shares, a special and final dividend, and a stock split.
Global brokerage firm HSBS continues to remain constructive on Bajaj Finance and has maintained a 'Buy' rating on the counter. The brokerage has a price target of ₹
10,800 per share on the stock.
HSBC have the most conviction in Bajaj Finance's earnings estimates within its NBFC coverage. In Q4FY25 so far, HSBC believes Bajaj Finance's earnings quality lags only ICICI Bank, and is much better than other NBFCs. The earnings inflection HSBC predicted is expected to unfold over FY26–28.
The brokerage wrote in its note that earnings per share (EPS) growth likely bottomed at 16% year-on-year in FY25, and it forecasts a 25% CAGR for EPS over FY25–28. HSBC believes the stock will compound in line with EPS growth.
HSBC also mentioned that its NIM estimate remains unchanged, expecting flat NIM in FY26 versus FY25. However, it has slightly reduced its fee income growth estimates.
Key risks, according to HSBC, include a sharp slowdown in growth or continued high credit costs.
Jefferies has a 'Buy' rating on Bajaj Finance, with a price target of ₹10,440 per share. It said that consolidated profit was largely in line with its estimates.
Management used a tax write-back to build buffer provisions.
Under new leadership, Bajaj Finance has slightly lowered its near-term growth forecast, while its long-term return on equity (ROE) outlook remains strong.
A key positive, according to Jefferies, was the moderation in core credit costs.
This was the first quarter with Anup Saha presenting as CEO, after serving as Deputy CEO for a long period. Jefferies commented that the new CEO has reset expectations slightly lower, but they remain credible given the company’s scale.
The brokerage has trimmed its FY26–27 earnings estimates by 2% to reflect lower AUM growth and fee income. It added that valuation premiums can be sustained due to Bajaj Finance’s strong growth and profitability.
Emkay Global has maintained an 'Add' rating on the stock, with an unchanged price target of ₹9,200.
Despite a challenging external environment, Bajaj Finance met most of its FY25 targets, except the initial credit cost guidance of 1.75–1.85%. Looking ahead, management remains confident of achieving 25% AUM growth and 20% RoE, with a revised credit cost estimate of 1.85–1.95%.
In light of Q4 results and management commentary, Emkay Global has adjusted its FY26–27 estimates, resulting in a 2–3% cut in projected earnings.
On the flip side, Citi downgraded Bajaj Finance to 'Neutral', citing that the stock has outperformed the Bank Nifty by 23% year-to-date and 20% over the past 12 months. The brokerage also lowered its price target to ₹9,830 from ₹10,200.
According to Citi, credit cost of 2.3% (including additional ECL provisions related to model redevelopment), NIM (calculated) decline of 9 basis points quarter-on-quarter led to core earnings miss.
However, a ₹290 crore tax reversal provided optical support to profit, which grew 19% year-on-year and 6% quarter-on-quarter.
Management trimmed its FY26 AUM growth forecast to 24–25%, compared to the earlier long-term guidance of 25–27%, citing a focus on credit cost control and operating leverage. The fee income growth guidance of 13–15%, well below AUM growth, was seen as a negative surprise.
Taking these factors into account, Citi cut its FY26–27 earnings estimates by 3% and also lowered its normalised RoE assumption, factoring in excess capital.
Of the 38 analysts that have coverage on Bajaj Finance, 25 of them have a 'Buy' recommendation, eight have a 'Hold' rating, while five others have a 'Sell' rating.
Shares of Bajaj Finance ended little changed on Tuesday at ₹9,105, close to its record high of ₹9,660.
