Synopsis : Bajaj Finance shares surged nearly 7% after the company announced its Q1 FY27 results, once again putting one of India's most closely watched non-banking financial companies (NBFCs) in the spotlight. The company reported a 28% year-on-year rise in net profit to Rs 6,080 crore, driven by strong loan growth, improving asset quality and lower credit costs.
The strong performance has encouraged some brokerages to turn even more optimistic. Others, however, believe that the stock's sharp rally has already factored in much of the future growth potential.
So, should investors buy, hold or sell Bajaj Finance now?
Here's what leading brokerages are saying.
Motilal Oswal upgrades Bajaj Finance to 'Buy'
Motilal Oswal has upgraded Bajaj Finance to a "Buy" rating and increased its target price to Rs 1,300, implying an upside potential of around 23%.
The brokerage believes three major factors are supporting the company's long-term outlook:
- Lower credit costs as the credit cycle improves
- Multiple growth engines contributing simultaneously
- Strong execution across both traditional and newer business segments
According to the brokerage:
"The credit cycle has turned, which will enable lower credit costs and higher earnings."
The report also highlighted the strength of Bajaj Finance's diversified business model, including:
- Core lending operations
- Digital ecosystem expansion
- Gold loan business
- New growth segments
Motilal Oswal stated that the company delivered a strong performance across:
- Loan growth
- Asset quality
- Net interest margins
- Credit costs
The brokerage subsequently raised its earnings estimates for the coming years.
Nomura maintains a positive outlook
Nomura retained its "Buy" rating while increasing its target price to Rs 1,140.
The brokerage believes Bajaj Finance continues to stand out among Indian NBFCs because of its ability to maintain strong growth while controlling funding costs.
According to Nomura:
"Overall, Bajaj Finance's 24% AUM growth was led by healthy growth momentum across product segments."
The brokerage pointed to particularly strong performance in:
- Gold loans
- Microfinance
- Commercial vehicle financing
- Tractor loans
Although urban personal loans remained relatively weak, other segments more than compensated for the slowdown.
Nomura added:
"We continue to like Bajaj Finance among NBFCs and maintain our Buy rating."
Nuvama remains cautious despite improving fundamentals
Nuvama maintained its "Hold" rating and increased its target price to Rs 1,175.
The brokerage acknowledged that growth momentum remains healthy and that asset quality continues to improve.
According to Nuvama:
"With growth re-accelerating and asset quality holding up well, we reckon Bajaj Finance shall deliver healthy returns over FY27–FY29."
The brokerage expects:
- Return on assets (RoA): approximately 4.1%
- Return on equity (RoE): approximately 20–21%
However, it also warned that Bajaj Finance continues to trade at a premium valuation compared with many of its peers.
As a result, Nuvama believes future gains could be relatively limited.
Emkay remains the most cautious
Emkay retained its "Reduce" rating while increasing its target price to Rs 1,050.
The brokerage acknowledged that the June quarter was stronger than expected and raised earnings forecasts by around 3–4%.
Even so, Emkay believes the market has already priced in much of the anticipated improvement.
The brokerage stated:
"Factoring in the Q1FY27 performance and management commentary, we adjust our FY27–FY29 estimates."
Despite these revisions, the firm continues to maintain a cautious stance because of the stock's valuation.
Why did Bajaj Finance perform so well?
Several factors supported the company's quarterly performance:
- Strong loan growth
- Lower credit costs
- Stable asset quality
- Healthy net interest margins
- Diversified business model
- Continued expansion into new segments
Lower funding costs also helped improve overall profitability.
Bajaj Finance share price performance
Bajaj Finance has delivered impressive returns over multiple periods:
- One month: approximately 12%
- Six months: approximately 24%
- One year: approximately 27%
- Calendar year 2026: approximately 15%
Additional metrics include:
- 52-week high: Rs 1,124
- 52-week low: Rs 787.90
- Market capitalisation: approximately Rs 6.98 lakh crore
- Price-to-earnings ratio: 36.85
Final verdict
Brokerages remain divided over the stock.
Bullish analysts argue that improving asset quality, lower credit costs and multiple growth drivers could continue supporting earnings growth over the coming years.
More cautious analysts, however, believe the current valuation already reflects much of this optimism.
For long-term investors, the debate now revolves around one key question: can Bajaj Finance continue growing quickly enough to justify its premium valuation?
Disclaimer: This article is intended solely for informational and educational purposes and should not be considered investment advice. Brokerage recommendations and price targets reflect the opinions of individual research firms and are subject to change. Investors should conduct independent research and consult a SEBI-registered financial adviser before making investment decisions.
