What's the link between Bajaj Finance and GST 2.0? Stock rallies 5% today

Bajaj Finance share price today

 

Bajaj Finance share price rallied 5 per cent to ₹944 on the National Stock Exchange (NSE) in Thursday's intraday trade. The rally in India's biggest consumer financier's stock came on expectations of higher credit growth amid an overhaul in the Goods and Services Tax (GST) structure.

 

The GST Council, on Wednesday, approved a two-slab structure, removing the 12 per cent and 28 per cent slabs, and slashing rates on a wide range of essential items to 5 per cent and 18 per cent categories.

 

At 09:46 AM, Bajaj Finance shares were trading 4 per cent higher at ₹933.20, as compared to 0.78 per cent rise in the Nifty 50 index . The stock had hit a 52-week high of ₹978.80 on June 9, 2025.

 

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Notably, average trading volume on the counter jumped nearly three-fold today, with a combined 8.54 million equity shares, cumulatively, changing hands on the NSE and BSE till the time of writing this report. Bajaj Finance stock was among the top gainers in the Nifty Financial Services index. 

What's driving Bajaj Finance stock price today?

 

Bajaj Finance is one of India's largest and well-diversified non-banking finance companies (NBFCs). The company provides loans for two wheelers, consumer durables, housing, SME & MSME businesses etc.

 

It has an asset under management (AUM) of ~₹4.41 trillion as of June 2025, and continues to be the largest consumer durables lender in India.

 

In this backdrop, the GST Council's decision to approve a sweeping overhaul of India's GST system, reducing the four-tier system into just two slabs -- 5 per cent and 18 per cent -- may boost sales of consumer-related goods, effectively pushing credit demand for such products.

 

Air conditioners, large-screen TVs -- previously taxed at 28 per cent -- will be moved to the lower 18 per cent bracket. This is expected to trigger price cuts of 8 per cent to 9 per cent on AC models, potentially spurring demand for premium, energy-efficient appliances during the festive season. CLICK HERE FOR REPORT

 

In a press release, the Government announced that the GST Council under Reform 2.0 has also slashed tax rates across the automobile sector. The rate rationalisation marks a structural positive for the auto sector. "Lower GST on entry-level cars, two-wheelers, and three-wheelers should lift demand in price-sensitive segments, while reduced levies on CVs like buses and trucks will support the commercial vehicle space," according to ICICI Securities.

 

On its part, Bajaj Finance, in its FY25 Annual Report, said that credit demand is expected to remain robust, driven by household consumption, which may get a leg up due to the tax relief announced in the Union Budget 2025-26.

 

"Fixed investment is expected to recover, supported by higher capacity utilisation levels, healthy balance sheets of financial institutions and corporates, buttressed by the central government’s continued emphasis on capital expenditure," it said.

 

Analysts believe Bajaj Finance enjoys a strong market position in the financing of consumer durables and two- and three-wheelers, and has adequate liquidity. Rating agency S&P Global Ratings expects Bajaj Finance to sustain its RAC ratio above 15 per cent, in-line with a very strong capital and earnings assessment, over the next 12-24 months.

 

Those at Mirae Asset Sharekhan, meanwhile, have a 'Buy' rating on Bajaj Finance stock with a target price of ₹1,000 per share.

 

"Bajaj Finance continues to derive benefits from a diverse loan portfolio, wide distribution network, effective execution and a strong management team. The management expects a 24-25 per cent AUM growth driven by existing and new businesses, along with stable margin, and peaking out stress. It is a leading player in the NBFC space which is expected to benefit from policy tailwinds in the short term and of strong portfolio with wide network in the medium to long term," the brokerage firm had said in its Q1 result update report.