Motilal Oswal upgraded the stock to ‘Buy’, and assigned a price target of ₹1,300, saying the lender is “firing on all cylinders” and entering a new earnings cycle.
The brokerage’s investment case is built around three key factors – an improving credit cycle that should reduce credit costs and lift profitability, multiple growth drivers including core lending, the digital ecosystem, gold loans and new businesses, and the potential for further earnings upgrades alongside valuation support.
It has raised its FY27 and FY28 earnings estimates by 4% and 2%, respectively, reflecting expectations of stronger AUM growth and lower credit costs.
CLSA maintained its ‘Outperform’ rating and increased its target price to ₹1,300, describing Bajaj Finance’s June quarter as proof of its “iron man status.”
The brokerage said profit after tax exceeded estimates by 6%, supported by stronger-than-expected net interest income, pre-provision operating profit and lower credit costs.
Assets under management (AUM) growth accelerated to 24% year-on-year from 22% in the previous quarter, while asset quality emerged as the standout, with reported credit costs easing to 1.5%.
CLSA believes the company can comfortably outperform its full-year credit cost guidance and highlighted management’s constructive outlook.
Citi also raised its target price to ₹1,300 while retaining its ‘Buy’ recommendation. The brokerage said that return on assets expanded to 4.7%, net profit climbed 28% year-on-year and return on equity crossed the 20% mark.
It highlighted stable net interest margins, broad-based AUM growth and core credit costs of 1.31%, below the company’s guided range.
Citi added that management deferred any guidance revision until after the September quarter, despite expressing confidence in business trends.
HSBC reiterated its ‘Buy’ call and increased its target price to ₹1,270, citing strong performance across all key operating metrics.
The brokerage raised its estimates for AUM growth, net interest margins and credit costs, resulting in 1-6% higher earnings forecasts for FY27-FY29. It also pointed to improving asset quality in personal and business loans and management’s confidence in sustaining profitable growth.
Nomura retained its ‘Buy’ rating with a target price of ₹1,140, saying the first-quarter profit exceeded expectations and asset quality remained a key positive.
It expects management to revisit guidance after another quarter if favourable trends continue.
Bernstein, while maintaining an ‘Underperform’ rating with a target price of ₹840, acknowledged that Bajaj Finance delivered a strong quarter driven by healthy balance sheet growth and improving asset quality.
It highlighted 24% AUM growth, stable margins, 23% growth in net interest income and lower credit costs, which supported a 27% rise in earnings per share.
During the post-earnings conference call, management indicated that FY27 growth momentum remains intact and suggested a guidance upgrade could be considered after the September quarter.
The company also raised its customer addition target to 18-20 million from 15-17 million, highlighted its strongest asset quality metrics in years with a GNPA ratio of 0.96% and underlying credit cost of 1.31%, and reiterated growth plans across gold loans, digital businesses and two new business launches by early 2027.
