Target: ₹1,200
Current Market Price (CMP): ₹950.20
Bajaj Finance has reported a Q4FY26 Profit After Tax (PAT) of ₹5,500 crore, aligning with market expectations, driven by robust growth in Assets Under Management (AUM) and lower-than-anticipated credit costs, although this was tempered by increasing net interest margin (NIM) pressures and rising employee expenditures.
AUM experienced a significant expansion of 22 percent, reaching ₹5.1 lakh crore, fueled by a broad array of growth across various segments, including mortgages, consumer B2C, gold loans, securities lending, urban sales finance, commercial lending, and rural sales finance.
The company has retained a cautious approach towards SME lending, though it anticipates a revival to double-digit growth by Q2-Q3FY27F. New segments such as gold loans, commercial vehicle loans, and tractor loans are expected to see accelerated growth. The cross-sell functionality has remained a vital contributor to the uptake of personal loans, car loans, and two-wheelers. Non-interest income is forecasted to grow between 16 and 18 percent.
The gross stage-3 assets ratio has decreased to 1.01 percent due to a widespread easing of financial stress. For FY27F, the guidance for credit costs is set between 1.45 and 1.6 percent. The calculated NIM stands at 9.5 percent, while the cost of funds has declined to 7.41 percent, with expectations of near-term moderation due to ongoing geopolitical tensions.
Bajaj Finance continues to operate effectively as a lender, supported by a superior cross-sell franchise and advanced technology, giving it a competitive edge over peers. The firm remains vigilant regarding management transitions and the pressures on NIM. Any fluctuations in the stock price may improve the risk-reward ratio. The company maintains an “Add” rating with a target price of ₹1,200, corresponding to approximately 4.5 times FY28F Book Value (BV) and around 23 times FY28F Earnings Per Share (EPS).
Published on May 4, 2026
