Bajaj Finserv, ONGC, BSE, Bharat Forge, Ather Energy, KEC International, GSPL, Syrma, Aavas, V-Mart Q2 Review

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HDFC Securities Institutional Equities

Bajaj FinServ - Strong and steady performance

Bajaj FinServ Ltd. delivered a strong performance during H1 FY26 across all its key operating businesses. Bajaj Allianz General Insurance Company clocked 9% YoY gross direct premium income growth, even as profitability clocked in marginally ahead of estimates on the back of higher realized capital gains and a favourable loss ratio.

Bajaj Allianz Life Insurance Company continued to benefit from a strategic shift in product mix, witnessing strong 47% VNB growth and a 560bps improvement in margins, despite 8% decline in APE.

Bajaj Finance delivered steady AUM growth (+23.6% YoY) although profitability continued to be impacted by higher credit costs and lower other income. With the NBFC business maintaining sector leadership, we expect the operational turnaround in both insurance businesses to drive a 500bps increase in SOTP contribution, triggering a re-rating.

We maintain Buy with a revised SOTP-based target price of Rs 2,565 (79% contribution from the flagship NBFC business).

ONGC - Crude production volume declines sequentially

We maintain our Reduce rating on Oil and Natural Gas Corporation Ltd., with a target price of Rs 225 as we expect slower ramp-up in oil and gas production.

Q2 FY26 reported Ebitda at ~Rs 177 billion (-3.0% YoY, -5.1% QoQ), below our estimates due to lower-than-expected crude oil production volume. However, PAT at ~Rs 98 billion (-17.8% YoY, +22.7% QoQ) came in ahead of our estimates due to higher-than-estimated other income.

BSE - Growth engine on track

BSE Ltd. reported a strong quarter, with both revenue and PAT coming higher vs our estimate. The consolidated revenue grew 11.5% QoQ due to growth in transaction, listing, book building, and colocation revenue.

The market share gain in options continued post the change in expiry, the premium market share increased to 24.4% in Q2 FY26 vs 21.4% in Q1. The premium ADTV stood at Rs 150 billion in Q2 (flat QoQ) but witnessed sharp jump in October 2025 and market share increase to 27%.

The regulatory overhang related to existence of weekly index option is receding gradually, but the regulator will keep a close check. The Ebitda margin has contracted by 65bps QoQ to 64.7%, led by high SEBI regulatory fees due to a ~25% QoQ rise in notional volume.

BSE introduced a policy in September 2025 to voluntary contribute ~5% of transaction revenue to the core SGF. The Q2 contribution was ~Rs 0.11 billion, representing one month under the new policy.

The revenue from colocation increased to Rs 0.46 billion in Q2 vs Rs 0.27 billion in Q1 led by revision in throttle charges. BSE expects to add another 70-90 racks by the end of year which will boost the colocation revenue.

We increase our EPS estimate by 6- 9% for FY26/27E EPS led by market share gain. The revenue/EPS CAGRs of ~24/31% over FY25-28E are robust. We maintain Add with a revised target price of Rs 2,750, which is based on 42x core Sep-27E PAT + CDSL stake + net cash ex SGF. The stock is trading at a P/E of 47/42x FY26/27E EPS.

Ather Energy - Superior execution continues to lower Ebitda loss

While the current volume inflection is being led by dealership expansion, the next inflection from FY27/FY28 will be led by portfolio expansion via its upcoming low-cost EL platform, which will introduce more affordable models to the portfolio, thereby bringing in a new set of customers and expanding its addressable market.

Going forward, we expect Ebitda margin to improve persistently over the medium term, aided by operating leverage, continuing shift to LFP batteries, introduction of the low-cost EL platform, improving nonvehicle revenue mix, and continued value engineering efforts.

The company continues to impress with its capability to scale volumes and increase market share along with margin improvement, which is also being aided by continuing value engineering efforts.

We value the company at 6.0x EV/sales for a target price of Rs 837, and maintain a Buy rating. Ather Energy continues to be our top pick.

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