Bajaj Finance tumbles 6%: Key signals for 8.6 lakh retail investors

Bajaj Finance Ltd began FY26 on a strong note, but analysts flagged potential headwinds amid management’s cautious stance on full-year growth.

In the June quarter, the company’s assets under management (AUM) rose 24 per cent year-on-year. However, the management remained guarded about expanding certain segments, including MSME and two- and three-wheeler loans, which together account for 15 per cent of the consolidated AUM.

"Further, Bajaj already lowered its growth guidance for the housing finance business (31 per cent of consolidated AUM, as on June 2025) to 21–23 per cent from 24–26 per cent earlier for FY26. With growth likely slowing in over 40 per cent of AUM, we see downside risk to the full-year FY26 AUM growth guidance of 24–25 per cent," ICICI Securities said. 

The brokerage retained its 'Hold' on the stock a revised target of Rs 910 against Rs 865 earlier, valuing the standalone business valued at 4.5 times September 2026 book value per share and Rs 143 towards housing subsidiary. The stock fell 6.39 per cent to hit a low of Rs 897.65 today.

While credit costs rose sequentially primarily due to stress in the MSME and auto loan segments, asset quality witnessed only a marginal deterioration for the NBFC with 8.6 lakh small individual investors. 

"Looking ahead, growth in the MSME segment is expected to remain subdued in FY26 due to ongoing macro headwinds. Management highlighted that consumer leverage remains a key area of concern, prompting the company to implement corrective measures across few product lines to limit exposure to borrowers with multiple active loans," MOFSL said.

The brokerage sees limited upside catalysts given the rich valuations of 4.4 times FY27E P/BV and a lack of near-term re-rating triggers. It suggested a target price of Rs 1,000 on the stock. 

JM Financial said it continued to like Bajaj Finance given its ability to deliver sector leading growth on cross-cycle basis, but near term concerns around growth/asset quality and rich valuations might limit upside. 

"We broadly maintain our estimates and BUY rating with a revised target price of Rs 1,000 (valuing at 4.5x/23x FY27E BVPS/EPS)," it said.

Looking ahead, a key priority for Bajaj Finance will be mitigating leverage in consumer loans, highlighting an area of concern acknowledged by the management. The company aims to stabilise its various business segments while executing strategic initiatives to optimise cost efficiencies, Nirmal Bang noted.  The brokerage has set a target price of Rs 978 apiece.