Bajaj Finance shares plunge 7% after growth guidance cut; analyts downgrade

Bajaj Finance share price drops 7 per cent after weak FY26 outlook; analysts cut targets citing slower AUM growth and rising credit costs

Bajaj Finance share price today

 

Bajaj Finance shares tumbled 7 per cent on Tuesday, November 11, 2025, as investors dumped the stock, concerned over the company's weak growth outlook following its September quarter (Q2FY26) results.

 

At 9:33 AM, the share price of Bajaj Finance quoted 6.8 per cent lower at ₹1,011.6 per share, as against a 0.25-per cent dip in the benchmark BSE Sensex index. Earlier in the day, the stock dropped 7.1 per cent intraday to hit a low of ₹1,008 per share.

 

Bajaj Finserv shares, too, faced investors’ wrath as the shares plunged 6.5 per cent intraday to ₹1,981 per share.

 

 

Bajaj Finance Q2 results highlights:

• Bajaj Finance saw a 21.9 per cent year-on-year (Y-o-Y) rise in consolidated net profit at ₹4,875 crore for Q2FY26.  
• The non-bank finance company's (NBFC's) net interest income (NII) also increased by 22 per cent Y-o-Y to ₹10,785 crore. 
• Bajaj Finance’s Q2 net interest margin (NIM) was stable at 9.55 per cent.  
• The company's assets under management (AUM) rose by 24 per cent Y-o-Y to ₹4,62,250 crore. 
• AUM growth was roughly ₹21,000 crore on a quarter-on-quarter (Q-o-Q) basis.  
• New loans booked during the quarter grew 26 per cent Y-o-Y to 12.17 million, while the deposit book surged to ₹69,750 crore from ₹66,131 crore last year.

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Bajaj Finance credit growth guidance cut

In a concerning development, the management of Bajaj Finance cut its FY26 growth guidance to 22-23 per cent from 23-24 per cent shared at the end of Q1FY26, and 24-25 per cent at the beginning of FY26.

 

The cut comes in the backdrop of heightened competition in the Mortgage segment, which accounts for 32 per cent of the total AUM, and risk containment in MSME (forming 12 per cent of AUM).

 

It highlighted that other businesses, such as Gold Loans, Consumer B2C, and Mortgages, are performing well and will drive incremental growth in H2FY26.

 

The management has also guided for FY26 credit costs toward the upper end of the guided 1.85-1.95 per cent range. 

 

On the funding front, Bajaj Finance said cost of funding (CoF) would moderate to 7.55–7.6 per centt for FY26, aided by a gradual shift toward NCDs, ECBs, and bank borrowings, to optimise the liability mix.

Bajaj Finance shares outlook

 

Analysts at Emkay Global have downgraded Bajaj Finance stock to ‘reduce’ from ‘Add’. The brokerage has also cut the target price on the stock to ₹1,000 from ₹1,075 per share. 

 

The analysts remain worried that the gradual moderation in growth and intensified competition would put pressure on growth and yields. This, in effect, will narrow Bajaj Finance’s premium valuation multiple compared to lending peers.

 

"Bajaj Finance remains a strong, well-diversified lending franchise, though recent moderation in growth/profitability could have a near-term impact. Based on the Q2 show/FY26 outlook, we cut FY26-28 AUM growth estimates by ~1-2 per cent and lower earnings per share (EPS) by 5-6 per cent," it said. 

 

JM Financial Institutional Securities, too, downgraded Bajaj Finance stock to ‘Add’ from ‘Buy’, but raised the target to ₹1,140 from ₹1,060 per share.

 

The brokerage cut its earnings per share (EPS) estimates by 3 per cent and 2 per cent for FY26 and FY27, respectively factoring-in the management’s reduced guidance.

 

"Considering the revision in the management’s guidance, we revise our EPS estimates for FY26 and FY27. We roll forward our estimates to FY28 and value the stock at ~4.7x/24x Sep-27E BVPS/EPS to entail a revised target price of ₹1,140, thus downgrading the stock to ADD," it said.  ALSO READ | Nomura lifts Lupin target price on US momentum, India growth recovery 

Those at Motilal Oswal Financial Sercvices, meanwhile, maintained their ‘Neutral’ rating on the stock but raised the share price target to ₹1,160.

 

The brokerage said that while early bucket trends remain stable with 3MOB, 6MOB and 9MOB cohorts showing improvement and vintage performance progressing positively across segments, the company guided for FY26 credit costs at the upper end of the guided band. 

 

"However, as the captive 2/3-wheeler portfolio continues to run down, new businesses become a higher proportion in the AUM mix, and the MSME book stabilises, the management expects credit costs to improve in H2FY26, with a more significant improvement anticipated in FY27. We model credit costs (as a percentage of loans) of at 1.95 per cent for FY26 and 1.8 per cent for FY27," it said.

 

Further, the brokerage has reduced its FY27 and FY28 net profit estimates by 2-3 per cent, estimating a CAGR of around 24 per cent for AUM and 25 per cent for PAT over FY25-FY28. It expects BAF to deliver RoA and RoE of ~4.2 per cent and 22 per cent in FY28.

 

"The stock trades at 5x FY27E P/BV and ~26x FY27E P/E. Despite a healthy PAT CAGR of around 25 per cent over FY25-28 and RoA/RoE in FY28, we see limited upside catalysts given the rich valuations and lack of near-term valuation re-rating triggers," it said as its rationale for maintaining the 'Neutral' rating on the stock.