Synopsis: The shares of this NBFC crashed more than 7 percent after the management in their guidance had given a cut ,along with commentary on stress in the MSME segment.
The company which is engaged in the business of lending and has a diversified lending portfolio across retail, SME and commercial customers with a significant presence in urban and rural India had its shares in the news today as the company’s management has given cuts in the guidance t showcasing a sluggish progress in upcoming future.
With the market cap of Rs 6,26,448 Crore ,the shares of Bajaj Finance Ltd reached a low of Rs 1005.05 compared to its previous day close of Rs 1085.40 which is a fall of about 7.4 percent in today’s intraday session .The shares are trading at a PE of 36 which is also its median PE.
About the Guidance , Q2 FY26 Results and others.
Bajaj Finance has reduced its AUM growth guidance for the current year from 24-25 percent which was the expectation before, to 22 – 23 percent as per the latest guidance. This is due to the lower growth expected in the mortgage and SME segment . The SME segment’s growth rate will range from 10 percent to 12 percent whereas the MSME growth will show a downward trend in the Q1 of next financial year .
The credit cost will also be higher from 1.85 percent to 1.95 percent , this has resulted in cutting down on 25 percent of its Unsecured MSME volumes , Signs of improvement to be seen in the starting of next financial year.
The revenue from operations is at Rs 20,179 crores in Q2 FY26 compared to Rs 17,091 Crore in Q2 FY25 which is YoY growth of about 18 percent. Similarly the net profit is at Rs 4,948 Crore in Q2 FY26 which has grown by 23 percent from Rs 4,014 Crore in Q2 FY25 . The company’s Net Interest Income (NII) has increased by 22 percent from last year to Rs 10,785 crore.
Analyst Outlook
Morgan Stanley states that the Investors may be disappointed with constant NIMs and a reduction in AUM growth guidance. Although it has reduced its Earnings Per Share (EPS) projections, it views any short-term stock dip as an opportunity to increase the stake in the company . With a price estimate of ₹1,195 per share, the broking rates Bajaj Finance as “overweight.”
HSBC has maintained its “buy” rating along with the revised target of Rs 1,200 per share and Jefferies has given a “buy” rating with target of Rs 1,270 per share.
On the contrary , Bernstein gave an “underperform” rating with a target price of Rs. 640 and stated,”In contrast to most NBFCs & banks that reported improving asset quality this quarter, BAF saw a sharp deterioration with almost every segment reporting higher gross & net NPA ratios despite continued growth,”.
Bajaj Finance, being India’s largest private-sector Non-Banking Financial Company (NBFC), offers a diverse range of financial products like loans and deposits to individuals and businesses. The company has demonstrated its massive scale, the company’s consolidated customer base has successfully crossed a milestone, now serving over 101.82 million customers across India.
Written by Leon Mendonca.
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