Morgan Stanley has maintained its 'overweight' rating on Bajaj Finance Ltd. with a target price of Rs 1,175 per share. The current market price is Rs 1,050.10 and the target price implies an upside of about 11.9%.
Bajaj Housing Finance released its Q1 FY27 results on Wednesday, July 29, 2026.
Bajaj Housing Finance management expects assets under management to grow 21-23% and indicated that competitive pressure on asset pricing continues.
Against this backdrop, the company has guided to an additional 6-8 basis points of net interest margin compression, with full-year NIM compression expected at 20-25 basis points. It has also guided to credit costs of 10-15 basis points for FY27.
With the repo rate remaining steady since late 2025, pricing on new loan acquisitions has largely stagnated. However, the continued attrition of older, higher-yielding loans is resulting in lower yields on the existing loan book. This trend has also led to a decline in balance transfer-out rates, although the management is monitoring whether the improvement is sustainable, noted the brokerage firm.
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Management described overall market conditions as muted but said various initiatives undertaken by the company have supported strong growth in disbursements.
On asset quality, the brokerage said that the gross non-performing assets in the loan-against-property portfolio increased due to one weak account.
Stage 3 assets in the developer finance portfolio also increased after one Stage 2 account slipped into Stage 3. Resolution efforts are underway, while the management said the account had already been adequately provisioned when it was classified as Stage 2.
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