Bajaj Finance Shares Slide 6% Despite Strong Q1 Results; What’s Behind The Fall?

Last Updated:July 25, 2025, 13:33 IST

Bajaj Finance Share Price Today: Shares of Bajaj Finance nosedived over 6 per cent in early trade on Friday

Bajaj Finance Share Price Today: Shares of Bajaj Finance nosedived over 6 per cent in early trade on Friday, hitting an intraday low of Rs 898.10, despite reporting robust financial results for the first quarter of FY26.

Shares dropped 5.5% to Rs 906.40 on the BSE by 9:28 AM on Friday, following its June quarter results. At one point, the stock hit an intraday low of Rs 897.65, as investors reacted sharply to red flags hidden beneath the robust headline numbers. Parent company Bajaj Finserv also fell nearly 5%.

Q1 Performance: Strong Growth in Profit and Loans

On July 24, Bajaj Finance reported a 22% year-on-year rise in consolidated net profit to Rs 4,765 crore for Q1FY26, compared to Rs 3,912 crore in the same period last year. Revenue grew 21% to Rs 19,524 crore from Rs 16,100 crore.

The number of new loans booked during the quarter surged 23% to 13.49 million, up from 10.97 million in Q1FY25.

Despite the strong numbers, several brokerages raised red flags over asset quality and sector-specific stress. JPMorgan downgraded Bajaj Finance to “Neutral” from “Overweight,” citing growing pressure in the MSME, two-wheeler, and three-wheeler loan segments.

While acknowledging the company as the “best quality NBFC” in the market, JPMorgan noted the possibility of earnings downgrades due to rising stress and expects the stock’s re-rating to pause for a few quarters.

During its earnings call, the company said that asset quality challenges persist in MSME and vehicle segments, which will likely slow down Assets Under Management (AUM) growth in FY26. Management has guided for 23–25% AUM growth this fiscal year.

What Analysts Say About Bajaj Finance?

• UBS retained a “Sell” rating with a price target of Rs 750, citing continued stress in the MSME segment and a lack of near-term leadership transition risk.
• Macquarie maintained an “Underperform” rating with a target of Rs 800, saying the market hasn’t priced in lower growth guidance and higher credit costs. It believes the stock’s premium valuation (4.4x FY27 price-to-book) is already factoring in all positives.
• Goldman Sachs flagged the 160-basis-point drop in the provision coverage ratio as a concern, especially with persistent overleveraging and stress in the MSME loan book. It retained a “Neutral” rating with a target of Rs 969.
• Bernstein also maintained an “Underperform” with a Rs 640 price target, stating profitability pressures will persist amid shrinking loan spreads.

Amid the cautious sentiment, CLSA took a more positive view, maintaining an “Outperform” rating with a target of Rs 1,150. It acknowledged that while the quarter wasn’t “picture-perfect,” the performance was decent, especially in a tough retail credit environment. CLSA projects a 25% PAT CAGR for Bajaj Finance over the next two years.

Of the 39 analysts covering the stock, 20 have a “Buy” rating, 14 recommend “Hold,” and five advise “Sell.”

Despite the recent dip, Bajaj Finance remains one of the top-performing stocks on the Nifty 50 so far in 2025.

Aparna Deb

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More

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