Bajaj Finance stock fully priced amid some challenges, opportunities

Bajaj Finance posted robust Q1 FY26 AUM growth and efficiency gains but higher credit costs, MSME stress and regulatory risks suggest the stock is fully priced

Bajaj Finance’s (BAF) earnings for the April–June quarter (Q1) of FY26 were in line with estimates, with robust 24.6 per cent year-on-year (Y-o-Y) growth in assets under management (AUM) and higher operating efficiency. However, lower other income and elevated credit costs offset some of these positives.

 

Credit cost rose to 2.02 per cent compared with 1.97 per cent (adjusted) in Q4 FY25, with management flagging stress in the micro, small, and medium enterprises (MSME) portfolio, which accounts for about 12 per cent of AUM, due to the macroeconomic slowdown. BAF’s results reflected efficiency gains, with cost-to-income at 33 per cent