Bajaj Finance share price target: Why it is among Jefferies’ top NBFC picks
Bajaj Finance target: Jefferies suggested a price target of Rs 1,280 on Bajaj Finance, based on 5 times estimated September 2028 book value. It valued Bajaj Finance at 23 times price-to-earnings and about 1 times PEG.
- Sep 23, 2026,
- Updated Sep 23, 2026 1:53 PM IST
Jefferies on Wednesday said Bajaj Finance Ltd among its top NBFC picks after hosting Rajeev Jain, managing director, and the company’s management for a roadshow. The global investment bank said the Bajaj Finance management is confident about both near-term and long-term growth and profitability, and expects strong demand, asset quality and efficiencies to offset a slight pressure on net interest margins.
Jefferies suggested a price target of Rs 1,280 on Bajaj Finance, based on 5 times estimated September 2028 book value. It valued Bajaj Finance at 23 times price-to-earnings and about 1 times PEG.
Jefferies said the NBFC plans to use the current tailwinds to build resilience, while over the next 10 years it aims to grow assets under management at a 23 per cent compounded annual growth rate (CAGR) and increase profits at a faster pace. The global investment bank also said artificial intelligence remains a key area of focus for the management and board, while succession at the top will be internal, with an announcement expected around January or February 2028.
According to Jefferies, the management said the near-term environment remains strong, as reflected in nominal GDP growth and collections of GST and personal taxes. It also said the impact of El Nino has been lower than earlier fears. The government’s credit guarantee scheme for SMEs has disbursed $24-25 billion, mostly through PSUs, and this has eased asset quality concerns. Even though there could be one or two policy rate hikes, the management sees tailwinds for growth and credit costs.
In this backdrop, the company said it will build resilience by lowering growth in riskier segments, aligning fee pools and building provision buffers. Jefferies said that even as the cost of funds rises, Bajaj Finance’s asset-liability management and pricing remain well matched, and any compression in net interest margins can be compensated through lower operating expenditure and credit costs.
On the long-term outlook, Jefferies said the management remains confident of more than 20 per cent growth and a high return on equity over the next 10 years. It expects assets under management to rise from Rs 5 lakh crore now to Rs 40 lakh crore. The management said this would be supported by deeper client reach, new product offerings and India’s growth. It also expects to reduce leverage by 0.25x every three years while still generating a 19-20% return on equity over the longer term.
Jefferies said Bajaj Finance remains committed to using AI across verticals and is among the top users of compute capacity of key technology vendors in India. Senior leadership spends 20% of its time on AI initiatives, while employees’ use of internal bots for training and other engagements is rising sharply. The brokerage said this has helped improve staff productivity and client monetisation through voice-data analytics and automated customer identification to reduce deflection. With moderate branch expansion requirements of 5% CAGR and lower staff addition needs, the company is expected to see a structural annual fall of 25-40 basis points in cost-to-NTI, which can support return on assets.
On succession planning, Jefferies said the board and top management are working towards a smooth leadership transition as Rajeev Jain’s term as vice-chairman and managing director will end in March 2028. The next chief executive officer will be chosen from internal leaders and is expected to be announced around January or February 2028.
Jefferies on Wednesday said Bajaj Finance Ltd among its top NBFC picks after hosting Rajeev Jain, managing director, and the company’s management for a roadshow. The global investment bank said the Bajaj Finance management is confident about both near-term and long-term growth and profitability, and expects strong demand, asset quality and efficiencies to offset a slight pressure on net interest margins.
Jefferies suggested a price target of Rs 1,280 on Bajaj Finance, based on 5 times estimated September 2028 book value. It valued Bajaj Finance at 23 times price-to-earnings and about 1 times PEG.
Jefferies said the NBFC plans to use the current tailwinds to build resilience, while over the next 10 years it aims to grow assets under management at a 23 per cent compounded annual growth rate (CAGR) and increase profits at a faster pace. The global investment bank also said artificial intelligence remains a key area of focus for the management and board, while succession at the top will be internal, with an announcement expected around January or February 2028.
According to Jefferies, the management said the near-term environment remains strong, as reflected in nominal GDP growth and collections of GST and personal taxes. It also said the impact of El Nino has been lower than earlier fears. The government’s credit guarantee scheme for SMEs has disbursed $24-25 billion, mostly through PSUs, and this has eased asset quality concerns. Even though there could be one or two policy rate hikes, the management sees tailwinds for growth and credit costs.
In this backdrop, the company said it will build resilience by lowering growth in riskier segments, aligning fee pools and building provision buffers. Jefferies said that even as the cost of funds rises, Bajaj Finance’s asset-liability management and pricing remain well matched, and any compression in net interest margins can be compensated through lower operating expenditure and credit costs.
On the long-term outlook, Jefferies said the management remains confident of more than 20 per cent growth and a high return on equity over the next 10 years. It expects assets under management to rise from Rs 5 lakh crore now to Rs 40 lakh crore. The management said this would be supported by deeper client reach, new product offerings and India’s growth. It also expects to reduce leverage by 0.25x every three years while still generating a 19-20% return on equity over the longer term.
Jefferies said Bajaj Finance remains committed to using AI across verticals and is among the top users of compute capacity of key technology vendors in India. Senior leadership spends 20% of its time on AI initiatives, while employees’ use of internal bots for training and other engagements is rising sharply. The brokerage said this has helped improve staff productivity and client monetisation through voice-data analytics and automated customer identification to reduce deflection. With moderate branch expansion requirements of 5% CAGR and lower staff addition needs, the company is expected to see a structural annual fall of 25-40 basis points in cost-to-NTI, which can support return on assets.
On succession planning, Jefferies said the board and top management are working towards a smooth leadership transition as Rajeev Jain’s term as vice-chairman and managing director will end in March 2028. The next chief executive officer will be chosen from internal leaders and is expected to be announced around January or February 2028.