Edit this postWhy Are Brokerages Divided on Bajaj Finance’s Outlook After Q2 FY26?
About Bajaj Finance
Bajaj Finance Ltd., India’s largest diversified NBFC, continues to maintain industry-leading profitability metrics despite a volatile macro backdrop. However, divergent analyst opinions post-Q2 FY26 highlight rising asset quality concerns versus steady operating leverage. While Morgan Stanley and HSBC remain optimistic, Bernstein flags higher NPL risk in MSME and unsecured loan portfolios.
In Q2 FY26, Bajaj Finance reported net profit of ₹4,875 crore, up 22% YoY and 4% QoQ, supported by a 22% YoY rise in NII to ₹10,785 crore. Gross NPAs rose slightly to 1.06% (from 1.03%), while Net NPAs improved to 0.46% from 0.50%. The company’s AUM grew 24% YoY despite higher stress in unsecured loans.
Traders assessing NBFC momentum and derivatives positioning can explore the Nifty Scalping Tip for short-term cues.
Brokerage Snapshot — Q2 FY26 Views
| Brokerage | Target Price | Rating | Key View |
|---|---|---|---|
| Bernstein | ₹640 | Underperform | Rising NPLs & higher credit costs |
| Morgan Stanley | ₹1,195 | Overweight | Stable credit cost & efficiency gains |
| HSBC | ₹1,200 | Buy | EPS CAGR 28% (FY26–28), strong RoE |
While Bernstein highlights stress in unsecured MSME loans and warns of rising delinquencies, Morgan Stanley expects improved cost efficiency and stable margins ahead. HSBC, meanwhile, forecasts a 28% EPS CAGR over FY26–28 on sustained credit cost normalization.
Strengths & Weaknesses
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Weaknesses
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Though near-term caution remains, Bajaj Finance’s strong capital position and consistent profitability make it a resilient large-cap compounder.
Opportunities & Threats
Opportunities
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Threats
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As markets evaluate rising credit costs versus operational strength, valuations remain divided, with target prices spanning ₹640–₹1,200. Consensus expects moderation in AUM growth to 22–23% in FY26.
Valuation & Investment View
- FY26 AUM Growth: 22–23% (cut from 24–25%)
- Valuation: 24x Dec-27E P/E (Morgan Stanley)
- EPS CAGR: 25–28% (FY26–28)
- Rating Spectrum: Range from Buy to Underperform
Investors can track NBFC sentiment and derivatives positions through the BankNifty Scalping Tip section to identify intraday financial sector cues.
Investor Takeaway
According to Gulshan Khera, CFP®, at Indian-Share-Tips.com, Bajaj Finance remains a sector leader despite credit cost concerns. Conservative investors may accumulate on dips, while traders should monitor sectoral sentiment closely. More expert insights are available at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Bajaj Finance Outlook
- Why Are Brokerages Divided on Bajaj Finance?
- What Are Bernstein and Morgan Stanley’s Latest Targets?
- How Do Credit Costs Affect AUM Growth?
- Is Bajaj Finance Still a Good Long-Term Bet?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions.
