Bajaj Finance, Petronet LNG, Birla Corp, Greenlam, Prince Pipes, Greenpanel, Neogen Chemicals Q2 Review

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HDFC Securities Institutional Equities

Bajaj Finance - Multiple offsets to near-term headwinds

Bajaj Finance Ltd.’s Q2 FY26 earnings were marginally lower than our estimates, with high credit costs (2.02%) partly offset by steady AUM growth (+23.6% YoY) and improving operating efficiency.

Credit costs remained elevated largely driven by MSME (11% of AUM) and captive two-wheeler/three-wheeler (1.5% of AUM), leading to management guidance for credit costs of upper end of 1.85- 1.95% range for FY26.

However, Bajaj Finance’s post-pandemic cross-functional investments continue to drive higher throughput and efficiency gains (cost/income at 33%; opex-to-AUM at 3.8%), which is likely to sustain during FY26-FY28E.

Further, the scale-up of new products (6.3% of AUM), along with strong uptick in festive season is likely to partly offset the growth headwinds in Bajaj Housing Finance and MSME business.

We revise our FY26/FY27E earnings estimates downwards to factor in marginally higher credit costs and lower loan growth and maintain Buy with a revised RI-based target price of Rs 1,105 (implying 4.5x Sep-27 adjusted book value per share; 23x Sep-27 EPS).

Petronet LNG - Lower term volume impacts profitability

Our Reduce recommendation on Petronet LNG Ltd. with a revised target price of Rs 255 is based on-

1. muted volume growth,

2. delayed capacity expansion, and

3. subdued return ratios resulting from the high capex cycle expected in the next five years.

Q2 FY26 reported Ebitda of Rs 11.17 billion (-6.9% YoY, -3.7% QoQ) and PAT of ~Rs 8.06 billion (-4.9% YoY, -5.3% QoQ), both below our estimates due to lowerthan-expected regassification tariff on services and long-term volume. Volumes were at 228 tbtu (-4.6% YoY, +3.6% QoQ).

Birla Corporation - Healthy volume growth YoY; stable margin QoQ

In Q2 FY26, Birla Corporation Ltd. delivered 7% YoY volume growth, which is driven by ramp-up in Mukutban (~20% growth YoY) and 7-11% offtake in Rajasthan and Madhya Pradesh. Unit Ebitda expanded Rs 251/metric tonne YoY to Rs 712/MT on better pricing and op-lev gains.

Thus, consolidated Ebitda rose 72% YoY (on a low base). We expect Birla Corp to deliver 6/12% volume/Ebitda CAGRs over FY25-28E. Slower pace of capex outgo should keep net debt to Ebitda ratio comfortably below 2x.

We maintain Add with an unchanged target price of Rs 1,450/share (eight times Sep’27E consolidated Ebitda).

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