Bajaj Finance Ltd.'s September-quarter results drew a broadly positive response from brokerages after the non-bank lender raised its FY27 assets under management growth guidance and reported a 28.5% increase in profit. CLSA, JPMorgan and Citi retained positive ratings, citing resilient operating metrics and broad-based growth across businesses. JPMorgan said the guidance upgrade was better than expected, while CLSA raised its profit estimates for FY27–FY29. Bernstein maintained Underperform, despite acknowledging that earnings momentum remained intact.
Management raised its FY27 AUM growth guidance to 26–27% from 23–25%, while retaining its medium-term growth outlook of 20–25%. It expects to disburse 60–62 million new loans and add 18–20 million customers in FY27. The company attributed higher loan-loss provisions partly to an additional macroeconomic provision of Rs 337 crore, saying the provision was intended to build resilience rather than address stress in the portfolio.
Bajaj Finance Q2 Highlights
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- Assets under management rose 26% year on year to Rs 5.84 lakh crore from Rs 4.62 lakh crore.
- Net total income increased 23% year on year to Rs 15,974 crore from Rs 12,982 crore.
- Net interest income rose 23.6% year on year to Rs 13,334 crore from Rs 10,785 crore.
- Operating profit increased 23% year on year to Rs 10,699 crore from Rs 8,685 crore.
- Profit rose 28.5% year on year to Rs 6,266 crore from Rs 4,875 crore.
- Loan losses and provisions stood at Rs 2,166 crore, compared with Rs 2,080 crore a year earlier.
- Gross NPA rose to 1.06% from 0.96% in the previous quarter.
- Net NPA increased to 0.42% from 0.39% in the previous quarter.
- Operating expenses as a share of NTI stood at 33%, compared with 33.1% a year earlier.
- Cost of funds improved by nine basis points sequentially to 7.31%.
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Here's what brokerages are saying after Bajaj Finance announced Q2 results:
CLSA
- Maintained 'Outperform'; Target Price At Rs 1,300
- Described the quarter as strong across parameters, with healthy asset quality trends across products.
- Retained Bajaj Finance as its top pick in the non-banking financial company space.
- Raised FY27–FY29 profit estimates by 2–3%, reflecting better growth, partly offset by lower insurance distribution fee income.
- Described the company as a strong compounder among large-cap Indian financial companies.
JPMorgan
- Maintained 'Overweight'; Target Price Cut To Rs 1,260 From Rs 1,310
- Highlighted strong operating performance in Q2FY27.
- Said the upgrade to AUM growth guidance was better than expected.
- Retained Bajaj Finance as its preferred pick in the NBFC space.
- Said management remained focused on preserving return on assets despite rising risks to net interest margins from higher funding costs.
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Citi
- Maintained 'Buy'; Target Price At Rs 1,300
- Said AUM guidance was raised as core operating metrics remained resilient.
- Flagged the increase in stage-two and stage-three assets, partly due to gold loans and the day-count effect.
- Said MSME lending had stabilised, with downward pressure easing.
- Noted that margins declined 10–12 basis points sequentially, with further compression likely.
Bernstein
- Maintained 'Underperform'; Target Price At Rs 840
- Said earnings momentum remained intact.
- Noted that credit costs remained benign despite a marginal increase in delinquencies.
- Highlighted continued AUM growth across businesses.
- Said lower credit costs offset softer net interest margin and net operating income trends.
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