Shares of Bajaj Finance Ltd faced significant selling pressure on Tuesday after the company’s latest quarterly update and management remarks. The stock plummeted by 7.55% to Rs 1,003.40 on the BSE by 12:23 pm, extending its early losses.
Although Bajaj Finance’s performance in the September quarter (Q2FY26) appeared strong, concerns arose regarding future growth speed and escalating credit expenses. The company’s profit after tax (PAT) surged by 22% to Rs 4,875 crore, with net interest income (NII) also climbing by 22% to Rs 10,785 crore. Furthermore, net total income increased by 20% to Rs 13,170 crore, and pre-provision operating profit (PPOP) rose by 21% to Rs 8,874 crore.
Despite these positive figures, the company’s revised forecast for assets under management (AUM) growth for FY26, now at 22–23% compared to the previous range of 24–25%, disappointed investors. Bajaj Finance cited mounting stress in its MSME and two- and three-wheeler loan portfolios as reasons for the revision.
Additionally, concerns regarding asset quality heightened, with gross NPA rising to 1.24% from 1.06% and net NPA climbing to 0.60% from 0.46% year-on-year. Loan losses and provisions surged by 19% to Rs 2,269 crore, leading to annualized credit costs reaching 2.05% of average assets.
The continuous increase in provisions, combined with management’s cautious approach, has raised apprehensions about a potential slowdown in crucial lending sectors in the near future.
Market analysts pointed out that while Bajaj Finance remains a highly efficient and profitable lender in India, its valuation premium is now facing pressure. Trading at nearly five times the estimated book value for FY27 and 26 times the earnings forecast for the same year, there is limited tolerance for any setbacks.
The recent correction in the stock price reflects a shift in market sentiment from unwavering optimism to cautious observation. The upcoming quarters will be pivotal in determining whether this decline is a temporary setback or the beginning of a slower phase for India’s renowned NBFC.
Various brokerages have diverse views on Bajaj Finance’s situation, with some seeing the correction as a long-term buying opportunity while others adopt a more prudent stance due to the risk of subdued performance in the short run.
As the market closely watches Bajaj Finance’s performance in the coming months, it remains to be seen whether this downturn is merely a brief stumble or signals a more extended period of challenges for the leading NBFC in India.